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A: UCC filings are required whenever a company pledges assets as collateral.
The presence of cautionary UCC filings indicates that the business has pledged key assets such as accounts, accounts receivable, contracts, hereafter-acquired inventory, leases, notes receivable or proceeds to secure financing. Use of these critical assets may indicate that the business is under financial stress.
A: Ultimately, your company has to decide whether the business you are reviewing is a good risk/opportunity for your organization. Here are some questions to keep in mind as you consider the available information from the perspective of risk:
• Is the company paying its bills on time? The days beyond terms (DBT) will provide you with insight into how quickly or slowly a business pays its bills. Payment trending information also is available so you can review payment trends over a period of time. Are the payments consistent? Are they improving slowly? The answers to these questions will provide information on potential issues.
• Does the customer have any collection accounts?
• The Intelliscore PlusSM score will provide a statistical score predicting the likelihood of seriously derogatory payments in the next 12 months.
• Is there any public record of concern, a bankruptcy or a tax lien?
A: An email recently announced enhancements to our score risk ranges.
• Intelliscore Plus now identifies the “high-risk” range as the bottom 10 percent of scores, or 1 through 10 as Intelliscore Plus is a percentile score
• Since the new model captures more “bad” accounts (risk of severe delinquency of 90 or more days past due) in the lower score range, the medium-high risk range has been reduced
• Expanded low-risk categories cover the top 50 percent of scores, so you have the option to approve and expedite more accounts for approval
A: Cautionary UCC filings include one or more of the following collateral: accounts, accounts receivable, contracts, hereafter acquired inventory, leases, notes receivable or proceeds. The cautionary message is designed to highlight their presence.
There is a description of cautionary within the executive summary and the UCC detail section within the Business Profile Report.
In the past we referred to these filings as derogatory UCC filings but since the risk associated with one of these UCC filings is often business or transaction specific we now refer to these UCC filings as cautionary.
A: Yes, you must be an active data contributor to use Delinquency Notification ServiceSM and Business Collections SuiteSM. Companies in early- to mid-stage delinquencies are best-suited to use Delinquency Notification Service, but the service can be effective for all stages and every industry type.
A: The Red Flags Rule requires financial institutions and creditors to manage their programs and take all of the following actions:
The initial program must be approved in writing by the board of directors, an appropriate committee of the board of directors or, if there is no board of directors, a designated senior manager
The approving party must be involved in the oversight and administration of the Program and must assign specific responsibility for the program’s administration and review the periodic reports required by the Red Flags Rule
Relevant staff must receive appropriate training, as necessary, to effectively implement the program
Appropriate and effective oversight of relevant service provider arrangements must be exercised
There are many resources available to help you gain the upper hand on the Identity Theft Red Flags Rule. I encourage you to visit our Red Flags site for more information, including a white paper, a Webinar and a data sheet.