He says: “Credit reports are kind of like a commercial Rubik’s Cube, there are literally hundreds of ways of looking at them, but only those who understand their logic truly get anything out of them.
“We use credit reports because we like to know more about our customers before we start delivering work for them. If a stranger approached you in the street, asked you to print off 100 copies of his wedding invitation on your home printer and said he’d pay you next month, you’d say no. Strangely, in a commercial environment this is viewed as perfectly acceptable. Credit reports, when read correctly, can give you an insight into exactly who this stranger is.”
Carrott has seen recessions come and go and fads within the industry peak and trough but believes there are certain principles which never change”
Carrott has seen recessions come and go and fads within the industry peak and trough but believes there are certain principles which never change. The things which you will find in a report are the company details, credit rating and a credit limit and up to five years of accounts filed with Companies House. There will also be the names of the directors and shareholders plus any County Court Judgements and a list of mortgages and charges on the business.
He also points out information you will not find in a credit report. He says: “There is certain information that you just cannot find out through a credit report, below are a selection of those we frequently get asked about; A Director’s personal address. Relatively recent legislation means that Company Directors are no longer required to file details of their home addresses.
“Payment performance. Key suppliers such as paper, telephones, electricity etc. will get paid first as they are “essential services” often in preference to smaller suppliers. Impending legal actions. Payment plans. Payment plan defaults. What the company accounts look like today. Traditional credit reports are based upon what’s included in the most recently filed accounts. Anything up to (and beyond) 21 months old.”
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ENDS