Credit reports are not perfect and in fact, they may often contain information that is either erroneous, obsolete, or misleading. In my experience, the best credit information is information that is verifiable, and one of the best ways to obtain it is through joining an industry credit group.
An industry credit group is a forum in which credit professionals of different companies that have customers in common, exchange credit, invoice, and payment information. The group is operated on a strict basis of trust in which the information shared is used only for the purpose of making credit evaluations, and never used for sales, marketing, or competitive purposes.
For example, let’s say that a customer in common is paying Creditor A and Creditor B on time but becoming delinquent in paying Creditor C. When the reasons behind the delay are shared by Creditor C, this could be a red flag to Creditors A and B that down the road, this customer may also become delinquent with them.
There are approximately 1,000 credit industry groups in the country, and more than 750 of them are run by the National Association of Credit Management and internationally by the Finance Credit and International Business Association.
The benefits of joining an industry credit group are that they:
- Provide highly beneficial networking opportunities
- Assist in the exchange of credit information on customers in common
- Facilitate credit decision making
- Introduce the latest developments in credit risk management
- Adhere to federal antitrust guidelines
I hope the above is helpful. Your thoughts and comments are most welcome.
Nancy Seiverd, President
CMI Credit Mediators, Inc.
All Rights Reserved
Source: NACM Credit Groups
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