What is a credit report?

A credit report is an instrument that records the credit status of an enterprise and is an important basis for credit transactions between financial institutions and commercial institutions. Credit reports are compiled by credit bureaus in accordance with certain formats and standards, which are collected, sorted, processed and stored from financial institutions, commercial institutions, public departments and other information sources in accordance with the authorization of the information subject or legal provisions.

What does a credit report do?

The role of credit reporting is mainly in the following areas:

To provide financial institutions with objective, comprehensive and timely information to help them assess the credit risk of borrowers or partners, reduce default losses and improve the efficiency of capital utilization;

Provide reliable and accurate information for commercial organizations to help them select suitable suppliers or customers, optimize business strategies, and enhance competitiveness;

Provide fair and transparent information to the society, help establish a culture of integrity and promote social and economic development.

What does a credit report contain?

The corporate credit report contains the following four parts:

Basic information: including enterprise name, unified social credit code, registration number, organization code, etc;

Enterprise profile: including registered capital (gold), paid-in capital (gold), business scope, etc;

Business operations: including annual statements (balance sheet, income statement), major financial indicators (total assets, total liabilities, operating income, etc.);

Enterprise credit information: including the number and balance of loan accounts (number and balance of normal accounts, number and balance of concern accounts, number and balance of secondary accounts, number and balance of suspicious accounts, number and balance of loss accounts), overdue loan (overdue number, overdue amount, longest overdue months, etc.), loan settlement (settlement date, settlement method, etc.), guarantee information (guarantee contract number, guarantee amount, guarantee method, etc.), number and balance of credit card accounts (number and balance of normal accounts, number and balance of concerned accounts, number and balance of secondary accounts, number and balance of suspicious accounts, number and balance of loss accounts), overdue credit card (overdue times, overdue amount, longest overdue months, etc.), settlement of credit card (settlement date, settlement methods, etc.), number and balance of quasi-credit card accounts (number and balance of normal accounts, number and balance of concerned accounts, number and balance of secondary accounts, number and balance of suspicious accounts, number and balance of loss accounts), overdue status of quasi-credit card (number of overdue times, overdue amount, longest overdue months, etc.), settlement status of quasi-credit card (settlement date, settlement method, etc.) external guarantee information (name of the guaranteed person, type and number of the guaranteed person's certificate, relationship between the guaranteed person and the enterprise, etc.).

How to read and understand credit reports?

The main methods and techniques for reading and understanding credit reports are as follows:

Understand the content and format of credit reports, master the rules and standards for the preparation of credit reports, and pay attention to distinguishing between different types of credit reports;

Pay attention to the important information in the credit report, such as the repayment status in the credit information, the bad record in the public information, etc., and analyze the credit characteristics and risk level of the information subject;

Compare information from different time periods or sources in the credit report, discover changes or anomalies in the credit of the information subject, and determine the credit trend or cause of the problem of the information subject;

Combined with other relevant information in the credit report, such as the marital status in the basic information and the business scope in the enterprise profile, the credit background and environmental factors of the information subject are comprehensively evaluated;

Compare with the credit reports of other information subjects, such as enterprises in the same industry or region, individuals of the same age or income, etc., to understand the credit merits or differences of the information subject.

Champ Consulting Services Customer Cases

Shangpu Consulting is a consulting company specializing in market research consulting, investment consulting and IPO listing consulting. It has many years of industry experience and professional team to provide customers with tailor-made solutions. In the course of its services, credit reporting is a commonly used information tool with the following applications:

Market research consulting: Credit reports can help Shangpu Consulting understand the industry structure, competitive landscape, market size, market potential, etc. of the target market, and provide customers with valuable market analysis and suggestions. For example, Shangpu Consulting once provided research and consulting services on the Chinese market for a European auto parts manufacturer. By inquiring about the corporate credit reports of the Chinese auto parts industry, Shangpu Consulting found that the industry has high market concentration and low The characteristics of high technical level and high credit risk suggest that customers adopt differentiated market entry strategies to improve their own technical advantages and brand influence, and avoid vicious competition with local companies.

Investment Advisory: Credit reports can help Shangpu Consulting assess the financial status, operating status, credit status, etc. of the target enterprise, and provide customers with well-founded investment decisions and recommendations. For example, Shangpu Consulting once provided investment consulting services in China's Internet industry for an American venture capital fund. By inquiring about the corporate credit reports of China's Internet industry, Shangpu Consulting found that the industry has high innovation ability and rapid development speed., Larger market space and other advantages, but also has disadvantages such as higher competitive pressure, lower profitability, and greater legal risks, it is recommended that customers choose target companies with core competitiveness and growth potential to invest, and pay attention to avoid related risks.

IPO Listing Consultation: Credit Report can help Shangpu Consulting to understand whether the target enterprise meets the listing conditions, whether there are factors that are not conducive to listing, etc., and provide customers with guiding listing plans and suggestions. For example, Shangpu Consulting once provided IPO listing consulting services on NASDAQ market for a Chinese e-commerce platform. By inquiring the credit reports of the enterprise and its related parties, Shangpu Consulting found that the enterprise has good financial performance, stable business model, excellent management team and other advantages. At the same time, it also noticed that the enterprise has some bad information such as tax arrears records and civil litigation records, It is suggested that customers deal with relevant problems in time, improve relevant documents and actively cooperate with the review and investigation of regulatory agencies and investors.

Summary

A credit report is an instrument that records the credit status of an individual or enterprise, and is an important basis for credit transactions between financial institutions and commercial institutions. The content of the credit report includes basic information, credit information, public information and inquiry records, and each part reflects the credit characteristics and risk level of the information subject. The methods and techniques for reading and understanding credit reports are mainly as follows: understanding the content and format of credit reports, paying attention to important information in credit reports, comparing information from different time periods or sources in credit reports, combining other relevant information in credit reports, and comparing them with the credit reports of other information subjects. Credit reports have a wide range of application value in the fields of market research consulting, investment consulting and IPO listing consulting. As a professional consulting company, Shangpu Consulting uses credit reports to provide customers with high-quality services and solutions.