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Running your own small business means wearing a lot of different hats. You have to define the strategic course of the company. Deal with clients and suppliers. Manage your staff. And keep on top of your finances. But is monitoring your credit score also on your to-do list?
Knowing your business credit score helps you keep your business financially healthy. We explain how your credit score is rated and what you can do to improve this score.
What is a business credit score?
A business credit score measures the risk of lending to you. It’s a rating that’s generated by the major credit reference agencies, like Experian or Equifax.
The credit score is used by banks, creditors, suppliers and customers so they can make a well-informed decision about whether to trade with you, or offer you a business loan.
Do businesses have credit scores?
Yes! If you run a limited business, your company will have a credit score separate to your personal one. Although they work in much the same way. However, if you’ve just registered your company, you may not see your business credit score straight away.
Your business credit score is a measure of how creditworthy your business is. It’s one thing banks, lenders and suppliers use to make decisions about lending, investments or term agreements.
If you’re a sole trader you will have a business credit score but this will be closely ties to your personal credit score to assess your creditworthiness.
Action: Sign-up for free and check your business credit score
What is a GOOD business credit score?
Different agencies use their own scales. For Experian, business credit scores range from 0 to 100. The higher the credit score, the better your financial position as a business is seen to be.
For example, a score of
Take a look at the Commercial Delphi Score table to see the full list of credit ratings.
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Which factors influence your credit score?
Your company’s credit score provides a snapshot of your business’ financial health. It’s influenced by a number of factors. Your industry type (listed on Companies House as a ‘SIC’ code) can influence your score. Your past payment performance can have an impact. Having active County Court Judgements (CCJs), filing your accounts late, or having high levels of debt can all have an effect too. It’s complex, but there are ways to understand these impacts.
Action: See which factors are influencing your business credit score.
How does a business credit score work?
Business credit scores are determined by a variety of different factors that show banks, lenders, suppliers and other businesses how your business is performing.
Examples include:
Your score shows banks and lenders how much of a risk it would be to lend your business money. Credit agencies each have their own scale for calculating your credit score. Our credit agency partner, Experian, uses the Commercial Delphi Score with scores that range from 0 (the highest risk) to 100 (the lowest risk).
Action: Sign-up to check your business credit profile.
How can I check my businesses’ credit score?
You can check your business credit score right now by signing up to Capitalise for Business. If you’re already signed up, you can check your score at any time by simply logging in. We work with Experian, one of the UK's leading credit bureaus, to show you the same score and data used by banks and lenders.
How can I build my business credit score?
Building your business credit score takes time, but with the right habits, you can improve it steadily. Here are some simple tips to help you get started:
These small steps can make a big difference over time. By staying consistent and organised, you’ll put your business in a stronger position to access funding when you need it.
Understanding the impact of your business credit score
As a small business, there will be times when you need to borrow money, or agree credit terms with your suppliers. You may want to take out a business loan, or negotiate a bank overdraft. Or you might want to secure improved credit with a supplier. But to do this, you need to be creditworthy, so lenders and suppliers know you can repay them.
The positive benefits of knowing your credit score
Using credit tools, it's possible to view the credit history of your business. This means that potential suppliers, business partners, or even competitors, can see your credit score. Knowing your credit score can influence whether customers and suppliers want to work with you. So, monitoring your business credit score – and being proactive about improving it – can help you improve your access to funding and trade credit.
How to improve your business credit score
The exact steps you need to take to improve your business credit score will be specific to your business and the factors that are having a negative impact.
But, if you looked at your score recently and it looked low, there are strategies you can do today to start improving your score. First, you’ll want to check you’ve got no long-standing overdue payments or County Court Judgements (CCJs) against your business. Then, check your payment performance, and whether you have any overdue payments.
You may want to consider looking into our Credit Review Service, powered by Experian. You’ll get your credit score reviewed by one of the UK's leading credit bureaus, and their experts to check if it's correct and see if it can be improved.
Read our recent article to find out how you can improve your credit score.
The value of improving your credit score for your business
By improving your business credit score, you will have better access to funding, lower interest rates on loans you take out, and improved terms on your trade credit.
With better funding and more money in the business, you’re free to drive your future growth – and that’s good news for any business owner.
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