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small business, credit score

8 ways to build a good business credit score

Capitalise Jun 28, 2023

Just like you have a personal credit score, your business will also have its own credit score.  A business credit score reflects a business’ creditworthiness, so a good credit score can open doors to financing opportunities, better terms with suppliers, and enhanced credibility. 

Here are the key steps you can take to build a good business credit score and set your business up for success.
 

1. Establish your business as a separate legal entity

To begin building your business credit score, it's important to establish your business as a separate legal entity. Register your business with Companies House, obtain a unique company number, and maintain clear separation between your personal and business finances. This will help build credibility. 

 

2. Open a business bank account

Opening a business bank account helps to manage your finances and build a strong credit profile. A business bank account enables you to keep your personal and business transactions separate and demonstrates financial stability and responsibility to credit agencies. Choose a reputable bank that offers business accounts tailored to your company's needs.

 

3. Pay bills on time

Timely payment is one of the most critical factors in building a good credit score for your business. Make it a priority to pay your bills, including suppliers, lenders, and utility providers, on or before their due dates. Consistently meeting your payments demonstrates your reliability and financial discipline, positively impacting your creditworthiness.

 

4. Monitor and review your credit profile 

Regularly checking your credit profile is essential. You can check for inaccuracies, errors, or fraudulent activity that could potentially harm your credit score.
With your Capitalise for Business account you can regularly check your credit score and receive alerts to any changes.

 

5. Build credit history

Building a solid credit history establishes your business's creditworthiness and helps to build a good credit score. You could start by applying for a business credit card or a small business loan. Use these credit facilities responsibly, making timely payments and keeping credit utilisation low. Over time, your responsible credit usage will help build a positive credit history, making it easier to access larger financing options in the future.

 

6. Create good relationships with suppliers and lenders

Building strong relationships with your suppliers and lenders can help you build a good business credit score. Communicate openly, meet your financial obligations, and establish a track record of trust and reliability to get positive references from suppliers. This will have a positive impact on your business credit score.

 

7. Try to avoid too many loan applications 

Each application for a business loan typically triggers a lender running a hard credit check on your business. Too many of these can lower your business credit score. If you’re looking to apply for a loan, speak to one of our funding specialists, they will work to find you the right lender, so that you avoid  unnecessary applications that could damage your business credit.

 

8. Check the credit profiles of the companies you work with 

Keeping track of the business credit scores of your suppliers, customers and partners means you can spot if anyone that you work with is potentially facing financial difficulty. By credit checking other companies, you'll be aware of any risks in your supply chain. This will enable you to reduce the impact to your business so that your credit score is not affected. 

You can check company credit scores with Capitalise for Business.

 

Following these 8 steps will help you to build a good business credit score. If you’re finding your score still needs a boost, our Credit Review Service can improve your business credit score in just 5 working days. 

Position your business for success with a good credit score, start tracking your credit score. 
 

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