A SURVEY by a firm of chartered accountants suggests that many business leaders are in the dark about how credit agencies operate.
The study of 100 businesses, carried out by Clough & Company and Bradford Chamber, revealed that four out of five respondents were unaware that credit reference agencies are unregulated.
About 80 per cent of those surveyed said they had no idea how credit reference agencies obtain information. Of the business leaders who had checked their credit rating just over half said the details they found were accurate.
Steven Gash, the practice chairman of Clough & Company, which has offices in Cleckheaton and Keighley, said: "Credit ratings and the information held by credit reference agencies is one of the most common reasons why businesses are refused credit or have their credit limits reduced.
"The economic downturn has caused the banks, and many other companies, to reconsider the credit terms they offer but there's no doubt many businesses will be suffering unnecessarily because of credit reference agencies. In many case these agencies hold out of date or incorrect information, which is partly down to the industry being completely unregulated."
He added: "We would encourage all business owners to check their credit ratings on a quarterly basis because many will be shocked by the discrepancies they contain.
"However, it is difficult to do this comprehensively when it is not known who holds what information about you and how to set about correcting any inaccuracies. We would like to see credit reference agencies having to give account holders the opportunity to confirm and verify that the data they are holding and supplying to banks and other key suppliers is accurate. At the moment there is no way of verifying this information."