Updated: Jan 26
One of the most perplexing elements of D&B’s scoring and analysis continues to be their calculation of conservative and aggressive credit limit recommendations.
The economy is struggling to regain momentum, and small business owners are watching the cost of doing business skyrocket, so why has D&B failed to bring the base guidelines in line to meet the demands of the current millennium?
It seems unfathomable how D&B expects small business owners to maintain a growing business based upon guidelines that have not been adjusted in more than 20 years. We have a client who came to us with credit recommendations that were lower than his company’s annual budget for break-room snacks. While we can help them improve their recommendation levels, D&B truly does need to adjust their algorithms and (begrudgingly) pry their way into the 21st century.
The discrepancy is mainly due to D&B not adjusting their algorithms to take into account today’s economic environment or factor in inflation over the past two decades. While D&B will try to claim the credit limit recommendations are a reflection of the business industry or the company’s creditworthiness, that kind of reasoning will no longer fly.