It is crucial for any business owner to possess solid information. Whether it is techniques for increasing sales, trends in the market, or the current economical climate – your business needs to know as much as possible to continue growing. However, there are two aspects of your business that can’t be influenced by reading Forbes or watching CNBC. The delicate tasks of hiring quality employees and granting customer credit require you to dig a little deeper. In these instances, you owe it to your business to perform proper credit checks.
A credit report is the fastest way to determine a person’s past credit history. There are currently three major credit bureaus (Equifax, Experian, and TransUnion), and the information that each provides will give you a clear picture as to a person’s overall credit-worthiness. This knowledge can prove to be invaluable to your company – for a variety of reasons.
Let’s start with an example of a potential employee. You have completed a lengthy interview, and the person seems perfect for the position. The candidate possesses all of the relevant education and experience, and you are confident in their abilities. But before you make the decision to hire, it is in your best interest to perform a credit check.
A clean credit report will only serve to substantiate your initial impression. However, a person with poor credit could represent a big risk to your company. Think about it — how many times have you read about a business being ripped off by employees? This is why it is so important to be thorough when meeting a future employee; and a credit report helps you do just that.
Credit reports are also invaluable resources when it comes to lending money. In a perfect world, a man’s word would be enough for a business to extend credit. Unfortunately, this is an unrealistic (and potentially damaging) way to do business. How will a customer pay off future loans? The answer can usually be found in the way the customer dealt with past loans.
As you can see, a simple credit report can help you make wise decisions when it comes to evaluating both employees and customers. Just remember to use common sense — and you will avoid being burned.