Your company credit score

We often work hard to keep a good personal credit score, but what about your business credit score?

Your score will determine whether or not you will be approved for finance, your choice of lenders, how much money you can borrow and at what rate. Your business score is available to the public and will show the financial reliability of your company.

Differences between personal and business credit score?

A personal credit score takes into account your own spending, borrowing and payment history.

If you have set up a limited company, your company is considered as a legal person. Therefore, any loans or debts will be the responsibility of the company rather than the individual.

However, if you have recently set up a new company or are a sole trader, lenders may take your personal credit score into account, and that of your partner(s), to determine the risk of lending.

How is your business score calculated?

Your business credit score is rated between 0-100.

0-49: High risk

50-79: Medium risk

80-100: Low risk

Credit reference agencies (CRAs) will look at:

Business ownership details
Past finance applications
Company accounts
Existing credit
Length of time the business has been established
Business industry
County Court Judgements (CCJ’s)

Unlike the United States who have a universal credit scoring system, here in the UK there are multiple Credit Reference Agencies (CRAs).

The main ones are:

You may receive a slightly different credit rating from each agency because not all lenders report to each CRA.

How can I improve my credit score?

You can register with any of the CRAs to check your credit score and obtain a credit report. It is worth checking regularly so you can see any changes to your score, check for errors and make changes to improve your score quickly.

Here are some things you can do to improve your credit score:

Make payments on time
Make early payments where possible
Submit and file your accounts and tax returns on time
Late submissions may indicate you are struggling financially. Contact us for support with this
Setup business banking and apply for a business credit card
Aim to keep spending at 30% of your available credit and make payments on time
Don’t make too many credit applications
If you make lots of applications within a small window, it will imply that you’re experiencing financial issues.
Check suppliers and business partners credit scores
These can have an impact on your score, for example, if they go into administration
Keep your business details up-to-date
Resolve CCJ’s quickly