Explore more insights

small business, business credit score

Common mistakes that can impact your business credit score

Capitalise Oct 24, 2023

Having a good business credit score is an important factor in your business’ success. Whether you’re looking to win new contracts, negotiate favourable terms with suppliers, or access a business loan, your business credit score could be the difference between opening new doors, or being held back. Unfortunately, many businesses make common mistakes that can negatively impact their credit scores, often without realising it. In this article we'll explore some of these common mistakes that affect your business credit score and offer practical advice on how to avoid them.


What affects your business credit score?


Not checking your business credit report

One of the most common mistakes businesses make is failing to regularly check their business credit profile. While not keeping an eye on your business credit report won't directly cause a bad business credit score, it can indirectly lead to issues, such as overlooked errors, identity fraud going unnoticed or unaddressed issues like late payments or unresolved legal notices.  
It's a good idea to check your business credit report regularly to spot any issues or mistakes. You can check your business credit score for free with Capitalise for Business, we’ll even send you real-time alerts so you’ll know right away if there’s anything impacting your business credit score. 


Late payments or missed payments

Just as with your personal credit score, late payments or missed payments can significantly impact your business credit score. Paying your bills promptly is essential for a good credit score. You can set up reminders, automate payments where possible, and closely monitor your financial commitments to ensure you meet your obligations consistently.


Not establishing a credit history

If your business is relatively new, you may not have an extensive credit history. Building a credit history takes time and responsible financial management. Consider opening a business credit card or taking out a small business loan to start establishing your credit history. Timely payments on these accounts can help improve your credit score over time.


Applying for too much credit at once

When you apply for a loan, lenders will generally carry out a hard credit search on your business. Multiple hard inquiries within a short period can make you appear high-risk and could negatively affect your business credit score. If you’re looking for a business loan, avoid too many applications to reduce the number of hard searches. When you search for a business loan with Capitalise, we’ll match you with lenders who are most likely to approve your application and our funding specialists will work with you to find the right solution, to reduce unnecessary hard credit searches.


Ignoring your supplier relationships

Your business credit profile will show your historical payment performance. If you pay your suppliers late, it may negatively impact your business credit score. Strengthen your supplier relationships by paying on time and maintaining open communication with them.


Your company filed accounts 

Credit bureaus give businesses a credit rating based on the information they have available from various different sources, so the more information that they have, the more accurate your business credit score will be. Your filed accounts with Companies House is an important source of information for credit bureaus. If you file your accounts late, this will negatively impact your business credit score. 

Incorporated businesses are required to file their accounts with Companies House within 9 months of their year end, so ensure that your accounts are filed within this time frame. It’s also a good idea to file your full accounts, rather than abbreviated accounts. This is because they contain more information, so the credit bureau can rate your business credit score more accurately. 


Not addressing legal notices 

Legal notices, such as a CCJ, will severely impact your business credit score. If a CCJ is filed against your business, it's crucial to address it within 30 days, as it can stay on your credit profile for up to 6 years. By signing up to Capitalise for Business, you can receive instant alerts to any legal notices registered, so that you can act quickly and reduce the impact to your business credit score.
Here’s what to do if your business has a CCJ.

By avoiding these common mistakes, you can reduce negative impacts to your business credit score. A strong business credit score will give you a competitive edge and open doors to more opportunities. As well as avoiding common mistakes, you should also take proactive steps to build a good business credit score.  

alternative finance
invoice finance
case study
trade finance
contract finance
working capital
startup loans
fashion finance
merchant cash advance
future accountant
product of the month
women in funding
partner of the month
business tips
live session
international women's day
covid19 coronavirus
corporate finance
accounting firm
asset finance
hire purchase
credit score
business funding
business credit score
south africa
small business
business loan
property finance
commercial mortgage
credit imporvement
spring budget 2023
small businesses
spring budget
commercial mortgages
trade debtors
cash flow
truck finance
late payments
lorry finance
building a financial safety net
trade debtor days
bridging loan
credit checks
interest rates
balance sheet
bad debt
company credit checks
debt collection
credit control
check company credit
business loans
instant offer
credit scores
credit review service
company credit check
commercial property
revolving credit facility
line of credit
Follow Us
Sign Up to Receive Updates

Related content

Signup to our newsletter

Have insights about the accounting community sent straight to your inbox. Sign up to our newsletter.