Myth 1: Think that corporate credit reporting is a corporate credit rating.

When many people hear corporate credit reports, they think of corporate credit ratings as the same concept. In fact, this is a big mistake. Enterprise credit report is a comprehensive reflection of the business status, credit status and risk status of the document, it contains the basic information of the enterprise, financial information, business information, legal information, social responsibility information and other aspects of the content. The enterprise credit rating is a kind of predictive evaluation of the enterprise's future solvency and willingness to repay the debt, which is based on the analysis and judgment of the enterprise's credit report and other related information. Therefore, corporate credit reporting is the basis of corporate credit rating, but not the same as corporate credit rating.

For example, Champ Consulting once provided a competitor's corporate credit report to a client in a manufacturing industry. The report shows that competitors are in good financial condition, with steady growth in revenue and profits, no record of major litigation or breach of contract, and good performance of social responsibility. However, after in-depth analysis, it is found that the financial data of competitors are beautified and false to a certain extent, and their main income comes from government subsidies and related transactions, which is not real market competitiveness; their operating risks are relatively high, relying on a few large customers. Once they lose these customers, they will face a serious decline in revenue; their credit risks are also relatively high, because its industry is facing problems such as overcapacity, environmental pressure, and backward technology, it may lead to a decline in its future solvency and willingness to repay debt. Accordingly, the credit rating given to this competitor by Champ Consulting isBlevel, I .e., a lower level of credit, rather than being judged on the basis of its apparent creditworthiness report.

Myth 2: Ignoring the update frequency of corporate credit reports

An enterprise credit report is a dynamic document that changes with the business status, credit status and risk profile of the enterprise. Therefore, the update frequency of enterprise credit report is a very important factor, which directly affects the timeliness and accuracy of enterprise credit report. If the update frequency of the enterprise credit report is too low, it may not reflect the latest situation of the enterprise, or even appear contrary to the actual situation of the information, resulting in wrong judgment and decision-making.

For example, Champ Consulting once provided a corporate credit report of a partner to a client in the financial industry. The report shows that the operating conditions of the partners are stable, the credit status is good, and the risk status is controllable. However, after verification, it was found that the report had been overdue for half a year, and during this half year, some major changes had taken place in the partners, including: a sharp decline in financial data, mainly due to the double blow of the new crown epidemic and financial supervision; there were some abnormalities in business activities, suspected of illegal operation and fraud; legal risks also increased because it was sued by several creditors, some of the assets were seized by the court. Therefore, Champ Consulting recommends that the client re-obtain an up-to-date corporate credit report and re-evaluate the creditworthiness and risk level of the partner based on the latest situation.

Myth 3: Only look at the positive information in the corporate credit report, not the negative information.

Many people have a tendency to pay selective attention when using or viewing corporate credit reports, I .e., to look only at the positive information in the corporate credit report that is favorable to them or in line with their expectations, while ignoring or downplaying the negative information that is unfavorable to them or contrary to their expectations. This approach is very dangerous because it can lead to an overly optimistic or pessimistic understanding of the creditworthiness and risk levels of the business, which can affect correct and rational judgments and decisions.

For example, Champ Consulting once provided a supplier's corporate credit report for customers in the e-commerce industry. The report shows that the supplier's business is in good condition, with high market share and brand awareness, and the product quality and service level are also high. However, after careful analysis, it is found that the supplier also has some negative information, including: unstable financial status, high debt burden and liquidity risk; poor credit status, more overdue repayment and bad debt records; high risk status, because its industry is facing fierce competition, changes in consumer demand, policy supervision and other issues, may cause its future operating difficulties and credit deterioration. Therefore, Shangpu Consulting recommends that customers should fully consider the positive and negative information of suppliers when cooperating with suppliers, and take risk prevention and response measures.

Myth 4: Only look at the overall evaluation of corporate credit reports, not specific indicators.

When many people use or view corporate credit reports, there is a tendency to simplify, that is, only look at the overall evaluation or conclusions given in the corporate credit report, and do not pay attention to specific indicators or data. This approach is very unscientific because it leads to a one-sided or superficial understanding of the creditworthiness and risk level of the enterprise, thus ignoring important information about the enterprise's inherent strengths and weaknesses, potential opportunities and threats, trends and factors of change.

For example, Champ Consulting once provided a competitor's corporate credit report to a client in the education industry. The report gives the overall rating of competitors as excellent, I .e. with a high level of credit and a low level of risk. However, after careful analysis, it is found that although competitors perform well in some aspects, they also perform poorly in some aspects. For example, in terms of finance, although competitors have higher revenue and profit growth rates, they also have lower return on net assets and higher cost rates; in terms of operation, although competitors have strong market expansion ability and innovation ability, they also have higher staff turnover rate and lower customer satisfaction; in terms of risk, although competitors have no significant legal risk and credit risk, however, there are also high industry and competitive risks. Therefore, Champ Consulting recommends that customers consider all aspects of specific indicators and data when analyzing competitors, rather than just looking at the overall evaluation.

Myth 5: Do not consider the source and quality of corporate credit reporting.

When many people use or view corporate credit reports, there is a tendency to blindly trust, that is, regardless of the source and quality of corporate credit reports, that all corporate credit reports are true and reliable. In fact, this is a big mistake. The source and quality of enterprise credit report are the key factors that affect the credibility and effectiveness of enterprise credit report. If the source of enterprise credit report is not formal or the quality is not high, then it may have some errors, omissions, distortion, bias and other problems, resulting in misleading or ineffective information, thus affecting correct and rational judgment and decision-making.

For example, Champ Consulting once provided a corporate credit report on a potential investor for a client in the catering industry. The report shows that potential investment targets are in excellent business conditions, with good credit standing and a manageable risk profile. However, after verification, it was found that the report was provided by the potential investors themselves and had not been reviewed or certified by any third party. After obtaining the true information of potential investment objects through other channels, it is found that there are some serious problems in the report, including: there are a lot of false and exaggerated financial data, and its actual revenue and profits are far lower than those shown in the report; there is a lot of concealment and deception in business information, and its actual market share and brand awareness are far lower than those shown in the report; there is a lot of cover-up and discredit in risk information, its actual legal risk and credit risk are much higher than those shown in the report. Therefore, Shangpu Consulting recommends that customers pay attention to the source and quality of the enterprise credit report when using or viewing the enterprise credit report, and verify the authenticity and validity of the enterprise credit report through a variety of ways.

Conclusion

The enterprise credit report is an important document that reflects the business status, credit status and risk status of the enterprise, and has important reference value for the financing, cooperation, investment and other activities of the enterprise. However, when using or viewing the enterprise credit report, the above five common misunderstandings should be avoided, namely: the enterprise credit report is the enterprise credit rating; Ignore the update frequency of the enterprise credit report; Only look at the positive information of the enterprise credit report, not the negative information; Only look at the overall evaluation of the enterprise credit report, not the specific indicators; The source and quality of the enterprise credit report are not considered. Only in this way can we more accurately assess the true credit level and risk level of the enterprise, so as to make correct and rational judgments and decisions.