When you’re looking to make a career move, the common questions are about compensation, benefits, company culture, training and other perks of the position. But have you ever thought to ask about a company’s credit rating? Most people don’t — but they should! Even though it may not be top of mind while searching for an independent freight agent program, an organization’s credit rating can have a direct impact on how you scale your book of business and how much money you take home.

Why does credit matter when you’re choosing a freight brokerage? What you should look for in a credit rating? And how can our outstanding credit rating here at Tallgrass be an advantage in your career? Let’s dive in.

Why Credit Ratings Matter for a Freight Brokerage

Just as most individuals have a personal credit score associated with their social security number, freight brokerages have a credit profile too. This credit rating tells an important story about the brokerage’s reputability, reliability as a partner and long-term stability.

As a freight agent, you’re in charge of running your own book of business. When you’re on the LLC or sole proprietor path for your business structure, you need to make sure that you’re choosing to partner with reliable companies whose track records are both extensive and consistent. 

“Freight agents need to view the credit profile as part of their business decision,” says Sean Richardson, President of Tallgrass Freight Co. “A big reason why freight professionals consider an agent program is financial. It’s cash flow, which means its credit. Especially for newer agents, good credit is everything. It determines whether you can work with other vendors, whether carriers will decide to work with you, whether freight factoring companies will decide to work with you, whether you get paid on time and more.”

A brokerage’s credit rating impacts your book of business (and your career!) from many angles. First, consider stability and security. “Choosing a partner that’s financially stable and has a strong track record of success is one of the most critical factors you need to look at,” Sean says. “If you don’t have that, the chance your own stability in the long term diminishes dramatically.”

Credit also influences your customer relationships and your service. “You want to be able to provide the high level of service your customers are accustomed to,” Sean notes. “Poor credit ratings can dramatically influence their view of you as a broker and a service provider. “And having a service failure, or not being able to provide the high level of service that someone is accustomed to, will dramatically impact their view of you as a business owner.” 

If you partner with an unstable and unreliable brokerage, it’s highly likely that you’re putting your career and your customer relationships at risk. “You can see business example after business example where it looks like a good company and then, before you know it, they’re gone,” Sean explains. “A lot of freight agents hope their partners are doing the right things, but that’s very different from confidently knowing that you’re going to get paid, your carriers will be taken care of and you’re not facing layoffs.” 

A strong credit rating also indicates that the freight brokerage can handle the ups and downs of the freight market and have an existing track record of success. “Without that, the chance of being stable in the long term diminishes dramatically,” Sean says.

Credit Profiles: Why You Should Ask — And What to Look For

When you choose a freight broker network to join, you’re aligning your name and your reputation with theirs, so you want to make sure that their financial circumstances are stable. But many prospective freight agents simply assume that everything’s on the up and up with a freight brokerage – especially if their social media presence or website is impressive.

“Very rarely do potential agents bring this topic up in conversation, and I think that’s a huge miss,” Sean says. “I think there are a lot of assumptions made that if a company has a strong digital presence, they have a strong financial position. And that’s not always the case.” 

Sean strongly recommends looking past the public face of a company and doing your due diligence to confirm that they’re financially stable before moving forward with any partnerships. “In reality, if you’re not doing your due diligence, you’re potentially setting yourself up for a huge downfall,” Sean says. “You’re potentially risking your business, your relationships with your customers, your career, everything.” 

“From a financial standpoint, credit influences cash flow,” Sean continues. “You never want to worry that a carrier won’t work with you because of poor credit or poor payment history. Partnering with a freight brokerage that has poor credit can drastically limit the carriers who will partner with you and haul freight for you. But on the flip side, when you choose a freight brokerage with excellent credit, the world is your oyster.” 

Before officially partnering with a brokerage, you should make a point to review their credit profile. And if the company doesn’t want to share their credit report with you? That’s a big red flag! A good independent freight agent network will respect the fact that you’re curious about something as important as a credit profile. Integrity is everything. You shouldn’t settle for anything less.

As Sean explains, a higher credit number signifies a more financially stable company. “Anybody who’s 90 or 95+ is in the top tier of companies, where you don’t really need to worry if they’re paying the bills or if their check is going to clear,” he said. But if you get down below 75, you’ll need to be very strategic and consider if they’re financially sound enough to work with. 

You’ll also want to inquire about their highest outstanding balances, if they’ve had any collection actions taken against them, if they have any bad debt and what their average days of pay look like. 

Taking the Plunge 

“Tallgrass has a strong reputation in the marketplace,” Sean says. “We treat carriers well, we pay timely and our credit profile is as strong as you can get.” Curious about our credit profile? We’re an open book! Get in touch and we’ll be happy to share.

Tallgrass Freight has the track record, the strong credit profile and the positive reputation to streamline your processes and make sure everyone gets paid on time. If you’re interested in joining an organization that’s built on security and stability – and can really make sure you’re set up for success – reach out to our team to learn more about becoming part of Tallgrass.