Recently, I came across a YouTube video by a tax accountant claiming:
“If Teikoku Databank (TDB) contacts your company for information, do not respond.”
The argument was based on concerns like:
- “Disclosing information might put you at a disadvantage.”
- “The information could spread without your consent.”
But I strongly disagree with this perspective.
Credit bureaus are not for profit—they are part of the infrastructure supporting a healthy economy.
The Origin of Teikoku Databank: Protecting Businesses from Fraud
Teikoku Databank was founded in the early 1900s, during a time when fraudulent businesses were rampant in Japan—not after World War II, but during the post-Russo-Japanese War boom.
During that period, numerous fake companies emerged, causing widespread harm to legitimate businesses.
Takeo Goto founded Teikoku Databank to protect member companies from these scams.
Thus, the origin of corporate credit research in Japan lies in serving the public good, not in chasing profit.
Why Information Disclosure Matters: Japan vs. the World
In countries like Europe and Singapore, companies are legally required to submit detailed information to government agencies, such as:
- Annual financial statements
- Executive board members
- Shareholder structure
This transparency is standard practice and the very foundation of trust in corporate credit.
In contrast, Japan has minimal mandatory public disclosure, which creates a serious information gap.
Private credit bureaus like Teikoku Databank and Tokyo Shoko Research help bridge that gap, enabling businesses and society to make informed risk assessments.
Withholding Information May Actually Increase Risk
Companies that refuse to cooperate with credit bureaus often raise red flags, such as:
“Are they hiding something?”
In reality, banks and business partners may interpret a refusal to provide information as a risk factor,
and respond by becoming more conservative or even declining business.
**Disclosing information is not a risk—**in today’s environment, withholding it is.
Not Just B2B: When Lack of Credit Checks Harms Consumers
The dangers of inadequate corporate screening aren’t limited to B2B transactions.
Examples:
- “Hare no Hi” Scandal: A kimono rental and photography company ceased operations abruptly, leaving consumers unpaid and unserved.
- “Pumpkin Carriage” Scheme: A fraudulent sublease real estate investment, leaving individual investors with massive debt.
These tragedies could have been avoided if the companies’ backgrounds had been made more visible beforehand.
Credit research and transparency are not just corporate tools—they are public safeguards.
Global Best Practices: The Role of Credit Bureaus Abroad
In Singapore, credit bureaus can enforce financial sanctions on ex-husbands who fail to pay alimony or child support.
Until payment is made, they are restricted from opening bank accounts or using credit cards—creating strong social pressure.
This system helped challenge the systemic neglect of single mothers.
In the United States, although companies have no obligation to disclose information to the government,
there is a strong business norm:
“Never lie to a credit bureau.”
That’s because the trust between information providers and credit agencies forms part of the economic foundation.
Conclusion: Responding to Credit Inquiries Is a Form of Social Trust
Even small businesses have a responsibility to contribute to the transparency of the economic ecosystem.
By choosing a corporate structure and benefiting from legal and tax protections, companies have an obligation to participate in society’s credit infrastructure.
Refusing to disclose information is tantamount to rejecting the concept of a transparent economy.
That’s why cooperating with credit bureaus is not a voluntary act—it’s a social obligation,
and a demonstration of responsible, trust-building behavior.
