In this article we look at what a business credit score is, and reveal some little known hacks to get your business in top shape.
What is a business credit score?
Business credit scores are based on a business’s financial history, and lenders use them alongside personal credit scores to decide whether a business is likely to repay debt.
How to build your business credit score
Below we share our top 10 tips on how to fine tune your business’s credit score:
- Make sure that the turnover through your business bank account is as regular as possible.
- If you have a business overdraft make sure your account balance is periodically in credit. This demonstrates that you are not over-reliant on the overdraft.
- Develop a history of successfully repaying borrowing.
- Pay your bills on time and keep up with finance repayments. Don’t max out your credit.
- Don’t make lots of finance applications in a short period. Lots of credit applications on your record can make you look desperate for credit, which can negatively impact your rating.
- Check your company listing at a credit reference agency like Experian or Equifax. Make sure the information is correct and that there isn’t any adverse information that you are unaware of. (Limited companies or LLPs)
- File your accounts and annual returns with Companies House on time. It’s a red flag if you don’t. (Limited companies or LLPs)
- Try and show a growing balance sheet on your annual accounts. A declining balance sheet weakens your credit rating. (Limited companies or LLPs)
- Have old charges such as debentures released if they are no longer needed. Having a debenture with one lender may stop another from wanting to lend. (Limited companies or LLPs)
- Make sure your registered office is correct. A common reason for getting county court judgements (CCJs) is that letters had been sent to the registered office but the Directors had not received them. (Limited companies or LLPs)
BIZL is an online business finance comparison platform that helps businesses compare finance fast, free and easily.
Do you need our help? Contact us on firstname.lastname@example.org or let’s chat on 0203 167 87 67