Technology amid quality credit information: Making sound credit decisions based on knowledge and wisdom. (Business Credit Selected Topic).(Brief Article)

Companies that have traditionally relied upon information from commercial credit bureaus now have an infinite number of alternative resources at their fingertips. With the availability of data through online databases and the Internet, credit departments are able to seek out the most cost-efficient resources for their information and look for new alternatives to credit bureau contracts, which continue to be a costly resource. As David Schmidt reported in the March 2001 issue of this publication in his article, "Get Better Mileage for Your Information Dollars," the costs associated with an annual credit bureau contract are one of the largest expenses for a credit department. This annual cost is exceeded only by employee compensation.

But for companies seeking new free or fee-based credit information providers, an interesting issue comes to play. How can you ensure these new, less expensive sources are sound and reliable? When it comes to the price associated with sound business and credit information, exactly how much does the old adage, "You get what you pay for," apply?

Peer Reviews

Perhaps one of the simplest steps in evaluating information sources is to research what others in the credit industry have said about the provider. Such reviews, either through conversations or published reports, can provide details on the source's strengths and weaknesses. Evaluations of credit information resources can often be found through key industry publications, newsletters, trade associations and discussion groups. Through careful observation of these reviews, you will find several criteria common in the evaluation process, which are discussed in this article.

Consider the Source

A true indication of the information's validity can be found through an evaluation of the author or authors' related experience. Any good credit information source has a reputable organization or authority behind it. The author or authors should have good standing in the industry. Look into how long the author(s) have been in the credit industry. If you're dealing with a single source, research his or her professional successes and awards, along with past and present employers. For a company or organization, find its history and areas of expertise. The compilation of reviews, as mentioned above, would be especially helpful in this area.

If the information is free and found via the Internet, use the links to and from the site as a point of evaluation. If a site can be accessed from industry expert or trade association web sites, this generally lends credibility to the information provider. If you are unable to determine the source's experience or background, at least find out if the source can be easily contacted for clarification on the facts they are reporting.