Any business enterprise and corporation operates based on risk when they are established. The risk of facing losses and losing money. The risk is justifiable, as long as, it is a poorly executed or drafted strategy. However, when you lose money due to something like fraud or theft, that kind of loss stings in a different way.

We do not live in a crimeless world, these types of unfortunate incidents of fraud and identity theft among businesses are common in the USA. So, businesses have to look at security measures themselves to prevent any such cases. A good way to keep present and future finances safe is by credit monitoring. In this blog, we will discuss how credit monitoring can prevent any future fraud and theft incidents.

What is Business Credit Monitoring?

Business credit monitoring refers to the act of regularly monitoring your credit profile and credit score using credit reports from credit reputable agencies. One of the most popular agencies is an online smart business credit report. The credit reports allow for different levels of monitoring depending on the type of report. It can just give a simple overview and credit score, or it can even give an in-depth report and alerts for any major changes to the credit profile and the credit score.

The Role of Credit Reports

Credit reports are documents that provide an in-depth review to determine a business’s creditworthiness. Businesses use them to better understand their current credit score standing. Credit reports along with credit scores play a major role in a business’s access to finance, loans, and securing vendor credit.

A Credit Report Includes:

• A Credit Score- A number between 0-100 for businesses and 300-850 for individuals.
• Credit History- Records the number of payables throughout a period, highlighting how many are paid on time, due, and late.
• Credit Utilization- It is a ratio of the amount of credit used to the amount of credit available.
• Public Records- Information on bankruptcies, other cases, and judgments.
• Company Profile- The credit report has to be identifiable so information like EIN, name of the business, owner details, etc.

How Credit Monitoring Can Prevent Fraud

Businesses Can Fall Victim To Many Credit Related Frauds. These Include:

• Identity Theft- Identity thieves steal business information to open new accounts and make unauthorized transactions.
• Account takeover- Criminals target existing credit accounts to withdraw funds and make credit purchases in account takeover schemes.
• Loan Fraud- when someone uses a business’s identity to secure loans, leaving the company responsible for clearing the debts.

Credit monitoring can be quite useful to counter all of these and many more types of scams.

Early Detection

By monitoring credit regularly any irregularity in the credit accounts will be visible quickly. Detecting a problem early reduces the extent of damage it may cause. Suspicious activities would be visible due to major changes in credit scores. Hence, the company can identify any new unauthorized accounts being opened in its name.

Many credit agencies offer alert services that can enhance early detection. These alerts will notify you of any major changes in credit scores and new credit inquiries. Hence, you will be able to take quick action without monitoring the credit profile all the time.

Verification of Credit Inquiries and New Accounts

Large businesses, cannot keep an eye on every minor credit inquiry as they occur. Another way to keep checks on accounts and credit inquiries is via verification at a later date. A weekly verification can keep things in check without wasting too many resources. Also, another way to take the verification process to the next level is by only allowing authorized personnel to verify and permit the inquiries. This will create a smaller circle to then verify for the higher-ups.

Protection Against Identity Theft and Account Takeovers

By having a verified fleet of personnel whose names you would expect to be on the credit report, any unauthorized name would be an easy identification of potential fraudulent activities. This will prevent the likelihood of identity theft and account takeovers.

What if someone steals the identities of authorized personnel? Combining a Multi-Factor Authentication system can further reduce the likelihood of this happening. This is because the person would have to get themselves and also, their inquiries verified by more trusted people of the company.

Dispute Solving

If international business credit reports show any fraudulent transaction or notification, a dispute can be filed against it at the earliest it gets caught. Consequently, this can prevent it from having a permanent impact on your credit score. Furthermore, by utilizing the services of a credit agency to monitor your credit profile, you can benefit from their assistance in a thorough investigation of such activities. Businesses use credit reports as reliable evidence to incriminate others or secure insurance payouts. This can mitigate or even eliminate your losses if available when needed.

Help Identify Internal Weaknesses

Credit Monitoring can help you identify a mole, if any exists within your company. Employee monitoring can be taken to the next level because they can easily get access to sensitive information that can be used to create fake accounts or initiate fake credit lines. Additionally, Clear segregation of duties can improve employee monitoring. This would make the credit monitoring action an oversight mechanism. Identifying and fixing any leaks and weaknesses within the organization will strengthen it from within.

Conclusion

In the century of technology, new ways of scamming, hacking, and looting businesses appear every day. A business must opt for a credit reporting service to maintain its financial health and creditworthiness. Furthermore, a credit monitoring routine will give more confidence to potential investors that their investment is in safe hands. It builds a reputation surrounding professionalism and caution for a business in any industry.

Finally, Investing in business credit monitoring not only safeguards your company’s finances but also contributes to its long-term success and stability. It does this by allowing you to detect suspicious activity early. Then by reporting and disputing the change to prevent harm to credit score. Finally, by maintaining financial health and a good relationship with the stakeholders.