Reducing risk through blended credit profiles

For commercial lenders, slight improvements in risk forecasting can reap significant returns when assessing the credit risk of their small business portfolios. By making a simple adjustment to how they assess risk, they can more accurately filter prospective borrowers, or be alerted sooner to potential problems.

In this whitepaper we discuss the findings of a recent Experian study involving a data set consisting of 80,000 consumer credit profiles linked to businesses. We tracked the records over a three-year period in order to observe both good and bad credit behavior. This research quantified just how important it is to review both a small business’s credit profile, and its owner’s consumer credit profile when assessing risk.