FAQ's

Welcome to the TransCredit general questions and answers section. We hope you find them helpful and informative. If you don't find the answer to your question, please "click" on CONTACT US and send us your question via email.
What can I do to improve my credit score?

We suggest you take these steps:

  • Apply to TransCredit for your TransNumber tm, this will allow you to have access and input to your credit report.
  • After reviewing your report, add references:
    • That you have done business with the longest.
    • That you do the most business with.
  • Make sure that your business start date is correct, if not provide proof of start-up date.
  • Reduce your "Days-To-Pay" so that your check arrives at the carrier by day 30 from their invoice date.
Why does my company have a credit score?

This is an important question as the trucking industry is moving toward "risk-based" pricing; a business trend that is spreading like wild-fire in all areas of the business world. Interest rates on bank loans, credit cards, even premiums on your insurance are rapidly being hinged to the credit score. In other words, this means that the higher the score the less paperwork needed to prove credit worthiness, this results in quicker decision making and lower credit costs to the user. In the open market place that now exists in transportation, this translates to more competitive rate negotiations. Simply put, if the credit score is higher you may be more apt to accept the shipper's or intermediary's freight at a lower rate since you know the turn of your money is assured.

"Your credit score will determine if you get credit at all, and the interest rate on that credit", says Ed Ojdana, president of Experian Consumer Direct, "The better the score, the lower the interest rate and that can save you a ton of money".

Why is my credit score lower than others?

This question is most often asked by new start-up operations. Typically the score is low due to the length of time in business. Although you may be paying your bills timely, history from all credit reporting agencies including D&B, who has been doing this since 1845, shows a strong tendency for companies to fail within the first 5 years of business.

And it's not just credit that places great emphasis on longevity, just think of the last time you looked at someone's resume that had changed jobs every 6 months, they were not nearly as employable as the person who stayed on the job for 5 yrs or more.

Of course there are other factors, such as collection activity or slow payment trends that will seriously affect your score.

How is my credit score calculated?

There are several contributing factors that go into the makeup of the TransCredit Score, but let's address the 6 most heavily weighted items.

The first three deal with time:

  • Length of time in business. Our model does credit you with a greater score for every 6 months longevity during the most crucial first 5 years.
  • Length of time your references have done business with you. Again you get a greater score for longevity.
  • Days-To-Pay@. How long does it take you to pay the carriers freight bill. This is based on credit terms, let's for a moment consider those terms as net 30. You therefore get bonus credit for less than 30 and begin to be penalized for payment time greater than 30 and yes we include a fudge factor for the US Mail transit time.

The next three are financial:

  • Amount of business that you do, the greater the revenues, the better the score. If your company's annual revenues are $1 million, you must appreciate your competitor who has built his company to $20 million, he will score higher than you as a result.
  • Amount of current indebtedness. Higher current debt indicates a greater ability to handle risk. Just like in revenues, if you average $2,000/month with your carriers you will score less than the company that averages $10,000/month.
  • Collections or Past Due Amounts. More activity here substantially reduces ones score.
Why is the credit score different than D&B or Experian?
To give you a better understanding let's start with a little history of credit scores. The most famous of these scores is known as the FICO score, which was the model developed by the Fair-Issacs Company in the late 1950's and is applicable to consumers. Today, Fair Issacs credit scoring is behind the scores you see from the three primary credit agencies: Experian, Equifax, and TransUnion. The FICO score ranges from 330-830. A score of 620 or less is considered sub-standard, yet the national average today is 678 with the NE US being the highest at 701.
 
Commercial scores published by D&B, Experian, and TransCredit are on a more simplified range of 0-100. The truth is that the Fair-Issacs Company, the major credit companies and TransCredit do not divulge how their scoring model works due to the competitive nature of the credit business, just as each of you would not publish a list of your customers and the rates you charge them for your competition to see. So in reality each company uses a different computer model to tweak the same data... to their belief that their score is the best. Invariably that produces different scores.
 
So why is the TransCredit score better? Are you in or do business with the trucking industry? At TransCredit, that's all we do! January 2013 begins our 27th year in this industry; we have the only credit score that is determined by exclusively evaluating trucking industry payment terms.
Can I obtain a copy of my credit report?
Yes, there are (2) two ways.
  • Best is to contact TransCredit and apply for a TransNumber?. You will then be given a temporary Password that will allow you to view your company credit report online. You may also dispute or add to information you find on your report.
  • You may also request a copy of your report be faxed or mailed by calling 1-800-215-8448, Press (1) for Customer Service.
Will you inform me of negative reporting on my credit?
Yes, but it will require that you be a subscriber to that TransCredit product.
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