Reported by Donna Fenn and Bruce G. Posner

Checking Credit;

 

When checking up on a customer's credit-worthiness, you don't have to rely exclusively on Dun & Bradstreet, whose information is notoriously incomplete and sometimes outdated -- especially with regard to private companies. For a fee, you can ask your banker to do a "bank-to-bank" check, which will tell you something about the customer's credit line, minimum balance, and extent of borrowing. The information is liable to be a little vague, because the bankers' code of ethics forbids giving out exact numbers. You may hear, for example, that the customer has a credit line "in the mid six figures," meaning about $500,000. Nevertheless, that knowledge could help you to decide whether or not you should extend credit.

Additional insights are available from the National Association of Credit Management, a New York City-based trade group with more than 75 local affiliates. The cost of membership runs from $100 to $300, depending on your location. Once a member, you can purchase credit reports on specific business. A basic report can be had for around $10. NACM affiliates provide data on payment history, indicating the approximate line of credit given, amounts owed, amounts past due, and bill-paying history in general. Some affiliates also have information regarding tax liens against businesses.