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Building business credit is a key step for small businesses. Lenders, suppliers, and banks look at your business credit score to decide if they can trust you to pay on time. Think of it as your company’s financial reputation — it’s more than just a number. Strong credit helps you qualify for better business loan rates, get flexible payment terms from suppliers, and grow your business with confidence.
In this quick guide, we’ll explain how business credit works and share simple, practical steps to build a strong credit profile.
Understanding business credit and why it matters
Your business credit score is a number that shows how financially reliable your company is. Lenders and suppliers use this score to decide whether to give your business credit and what terms to offer.
Credit reference agencies, like Experian and Equifax, create your business credit profile based on information such as:
Based on this data, they give your business a credit score. For example, Experian’s score ranges from 0 to 100, with 0 being high risk and 100 being very low risk. The higher your score, the more trustworthy your business appears to lenders and suppliers.
Business credit score vs personal credit score
Every UK limited company has its own business credit score, which is completely separate from the owner's personal credit score. While your personal score reflects how you manage your own money, your business credit score shows how your company handles its finances.
If you’re a sole trader or your business is still new, you may not have a business credit score yet. In these cases, lenders will usually look at your personal credit score when deciding whether to approve a loan.
It’s important to keep your personal finances in good shape, especially if you’re just starting out and don’t yet have a strong business credit history.
Steps to build business credit
Building business credit takes time, it won’t happen overnight. By following the steps below consistently, you can create a strong credit profile that opens doors to better funding, supplier terms, and growth opportunities.
1. Set up your business as a separate legal entity
To build a business credit score, your company must be registered as a limited company (Ltd). This gives your business its own legal identity, separate from your personal finances — a key step in creating a standalone credit profile.
You can register your company through Companies House. The government website offers a clear, step-by-step guide on how to register a limited company.
By making your business legally separate, lenders and credit agencies can assess it on its own merits, not based on your personal credit history.
2. Open a business bank account and manage it well
Keeping your business and personal finances separate is essential for building business credit. If you haven’t already, open a dedicated business bank account and use it for all company income and expenses. This creates a clear financial record that lenders and credit agencies can review.
Regular activity in your business account, such as steady cash flow and timely payments, shows that your business is financially stable and well managed.
To avoid issues:
Tip: Most UK business bank accounts offer free alerts for upcoming payments. Turn these on to stay ahead of upcoming payments.
3. Establish credit accounts in your business’s name
To build business credit, your company needs to start using credit under its own name. This shows lenders and credit agencies that your business can borrow and repay responsibly.
Start by applying for:
Even small, routine purchases can help build your credit profile, as long as you manage them well.
The key is to use credit wisely:
Doing this regularly helps generate positive payment history on your business credit report and shows you can manage credit without relying on it heavily.
4. Pay all bills on time
Your payment history is one of the biggest factors in your business credit. Always pay bills, loan repayments, supplier invoices, and credit cards on or before the due date.
Late or missed payments can hurt your score quickly, while consistent on-time payments build trust and improve your credit profile.
To stay on top of payments:
This also helps you avoid County Court Judgments (CCJs), which can stay on your credit file for six years and severely damage your score, even if after they're paid. If you receive a warning or notice, act within 30 days to prevent it becoming a judgment.
Good payment habits show you’re reliable. If you’ve built strong supplier relationships, you can ask if they can report your payment history to credit agencies as it can give your score a boost.
5. File your accounts on time
All UK companies are required to file annual accounts with Companies House. These filings are public and influence how lenders and credit agencies assess your business. Filing your accounts late can have a negative impact, so make sure to aways file your accounts on or before the deadline.
If you can, submit full accounts rather than abbreviated ones. These give a clearer picture of your business’s financial health and ensures your credit score accurately reflects your business' position.
If you work with an accountant, make sure to share all documents well in advance so that they can file on time. If you use accounting software, learn how to use it effectively and don’t leave filings until the last minute.
6. Keep your company information up to date
Make sure your company details are always up to date. If you change your registered address, directors, or other key info, update Companies House and let your bank and credit providers know. Outdated records can cause errors in your credit profile.
Also, make it a habit to check your business credit score. It helps you to spot any errors or problems early on.
With Capitalise for Business, you can check your Experian-powered credit score for free. Checking your own credit score does not affect it, so make sure to review it frequently.
7. Get your credit score professionally reviewed
Credit reference agencies update scores infrequently and usually only only after new financial data or accounts are filed. That means your score might not reflect recent improvements in your business.
If you’re planning to apply for funding or start a new partnership, you might need your credit profile updated sooner.
With Capitalise’s Credit Review Service (in partnership with Experian), you can request a professional review of your credit profile. Experian will assess any new data and information you present to them to spot any positive changes. In 96% of cases, this leads to an improved credit score and a higher trade credit limit, helping your business look stronger on paper when it matters most.
Access business funding with strong business credit
A strong business credit score makes it easier to get funding and on better terms. Lenders are more likely to say yes, offer lower interest rates, and approve higher limits when they see your business as low risk. That’s why it pays to build and maintain a good credit profile. It gives you more control, more choice, and more confidence when your business needs finance.
Once your credit score is in good shape, you can use the Capitalise platform to compare business loan offers from high-street banks, alternative lenders, and other funding partners, all in one place.
Our funding specialists help match your business with the right lenders, making it easier to get approved.
With a strong credit score and access to a broad lender network, affordable finance is just a few clicks away.
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