The Roots of Business Credit go Back to 1841
A long History of Business Credit Reporting
In 1841 Lewis Tappan established the Mercantile Agency in New York City in order to help merchants in their decision-making. He established a network of affiliates that would provide reliable, consistent and objective credit information. This was the first company of its kind formed to provide business information. To increase growth Tappan turned over the reins to Benjamin Douglas in 1849. Benjamin was able expand the network of offices through improvements in communication and transportation, thus increasing the customer base and improving the information available.
Benjamin Douglas began to establish offices and hire Business Credit Analyst. These analyst were reporters and interpreters skilled and trained in sound business practices. A Business Credit Reporter was a highly regarded position and many famous people like, Abraham Lincoln, Ulysses S. Grant, Grover Cleveland and William McKinley held the position.
In 1859 Benjamin Douglas transferred the company to Robert Graham Dun, who then changed the name to R.G. Dun & Company. Over the next four decades Robert was able to expand the company even more, establishing offices in the South, California and even North into Canada. He also published the company’s first reference book of credit information, called the Dun Book. This expansion continued overseas, with offices in London. Glasgow, Paris, Melbourne, Hamburg and even Mexico City.
In 1933 R.G. Dun merged with the Bradstreet Company. The Bradstreet Company was formed in 1849 by John Bradstreet, who was a lawyer. Bradstreet had come into possession of a large credit file while overseeing the liquidation of an estate. He decided to become a direct competitor of the Mercantile Agency, even moving from Chicago to New York City where he could go head to head with the Mercantile Agency. For years they were competitors, and because they overlapped each other in many activities and information it made sense for them to join forces. They renamed the company Dun & Bradstreet.
Over the years Dun & Bradstreet has become the largest reporter of Business Credit in the world, with a database of over 200 million companies and over 6600 employees. Other companies have emerged into the industry like CreditSafe, Equifax, and Experian. Second to Dun & Bradstreet in the Business reporting Sector is Experian with about 1/10th of the businesses listed for reporting. Experian and Equifax did not enter the business reporting sector until the 1990’s and although not as large a player in the industry as Dun & Bradstreet they have their lender/vendor sector who utilize their services.
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Personal Credit Reporting and a Seedy Past
Past Presidents worked in the Business Credit Industry because it was a highly respectable position, but this is not so in the personal credit reporting industry. In fact, the personal credit industry is filled with unprofessional behavior, mis-information and countless law suits. Equifax who started in late 1898, is the oldest personal credit reporting agency. But it’s roots are not so glamorous. Two brothers started collecting names and information of their customers from their grocery business. They kept records of the customers credit worthiness, and began to sell their lists to other merchants. From this they formed The Retail Credit Company which quickly expanded from grocers to the Insurance Industry.As they grew so did their tatics, they collected all kinds of info, from your childhood, martial information, rumors and anything else they could find out about you went in your file. They even gave bonuses to workers who could find anything derogatory about someone so that it could be placed in their credit file. This truly was an abusive way of doing business and they continued doing business this way for years. Because of their practices it forced the government to come out with the Fair Credit Act, and yet they still continued until the Government cracked down on them, tarnishing their name and reputation, thus forcing them to change their company name to Equifax.
This is only a small tidbit of some of the abuses that occurred in the personal credit industry. Improper filings, selling your personal information to anyone who would pay for it, mismatching data and more. These credit companies collect data and make money by selling it. They have bought company after company increasing their record content, they also have bought other companies to obtain data on personal usage including service companies, and even email companies. This information is used to compile data and sold off to companies for advertising purposes and more.
Business credit Reporting has been around longer than personal credit reporting, which really didn’t become streamlined until 1983. It’s important that you keep your business credit separate from your personal credit, to protect or limit the effect of information that is contained on your credit report and the people (vendors/lenders) who will view it.
Meet Aaron a Small Business Owner
I have been a business owner for the last five years. I found myself caught in the middle of trying to grow and staying a float. Sure, I had money coming in, but after expenses and a small payroll I made enough money to just get by. I tried to obtain business financing from my local bank and other lenders, but I was always declined. I had maxed out my personal credit which in turn lowered my credit sore significantly. I had heard about business credit but wasn’t sure how it worked or even if it did. It seemed to me it was something that wasn’t real.
I decided to give it a shot, only because I had tried every other avenue. After working with my Business Credit Strategist I was able to obtain business credit cards and a $56,000 business line of credit, based solely on my business credit file. Now I am looking to the future, I am growing my business and even looking for a second location.
Thank You for all your help.