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How to raise your business' credit score

Published on 2nd May 2018 - Last update on 16th October 2018

In order for your business to grow and thrive, making sure that you have access to business finance can be essential. Business finance allows you to fund and support any project or aspect of your day-to-day operations. However, if you haven’t already applied, is it your credit score which is holding you back? If you have adverse credit it will affect how much interest you’re charged for any business finance agreement and may even cut you off from some products entirely. But rather than allowing an adverse credit rating to limit the scope of your ambition, why not get your credit score back into shape instead? If you’re worried about how your business’ credit score may affect your application, there are plenty of ways in which you can improve your score and gain a more favourable deal for your business.

1. Check up on your score with a Credit Agency

Before applying for any business finance solution, it might be a wise idea to check your business’ credit history beforehand. You can do this with a number of Credit Agencies, such as Experian, Equifax and TransUnion. Just remember not to check your score too many times in a short period as this can cause lenders to assume that your business is suffering from financial difficulty.

2. Spot and rectify any errors

When you receive your business’ Credit Report, make sure that you check it thoroughly for any irregularities. Using your own documents, check all of the data that the report contains. If there are any errors, contact the credit agency that generated the report and inform them as soon as possible. Even errors such as out of date information or a misspelt address can affect the strength of your credit score. Therefore, getting these issues resolved should be treated as a priority because once it reaches the attention of any lenders it’ll be your word against a leading credit agency. If there are any genuine issues blemishing your score, you might be able to have them removed usually after a period of 6 years has passed.

3. Maintain a reputable trading history

Also, you should try to maintain a reputable trading history whenever possible. This means regularly paying off debt, tax and any other operational costs on time. If you’re expecting to receive a CCJ, note that you might be able to avoid having it appear on your Credit Profile if it’s been resolved within 28 days from the day it was issued. However, if your business is affected by CCJs, lenders will look into whether they’ve been resolved and how frequently they’re issued. Nevertheless, lenders will generally prefer to work with a business owner who’s resolved their CCJs rather than let them go unpaid.

4. Review your personal credit profile

In addition, lenders may also ask to review your personal credit profile as well, especially if your business has a limited trading history. As such, how you handle factors like credit card debt, utility bills and any other expenses, gives lenders an indication of where you stand financially and your commitment to repaying the agreement on time. So showing that you can manage your own finances is a must.

5. Keep your company records up to date

Finally, if there have been changes to your business, you must ensure that this data is up to date. This means keeping your accounts in order and filing any relevant data on time. If the data that appears on Companies House isn’t current, lenders will assume that your business is suffering from financial difficulty, which will affect your credit score and cause them to adopt a cautious approach towards your business.

Are you looking to apply for business finance?

Ensuring that your business has access to the funds it needs to develop and succeed isn’t easy, but it is essential. One way in which many UK business owners overcome this matter is through applying for business finance. But if you’re looking to gain additional capital for your business, you’ll also want to acquire an agreement that comes with a competitive interest rate and favourable terms and conditions. This is why maintaining your credit profile is so crucial. Whenever you apply for business finance, lenders will usually ask to review your credit score in order to ascertain the risks that are involved and decide how much interest they should charge. However, if your business is suffering from adverse credit, know that it isn’t the end of the world. If you can manage having to paying more interest, there are funding opportunities still available. All you need to do is decide which solution is suitable for your business.

At Rangewell, we’re an Access to Finance specialist working with over 300 lenders to offer you an overview of more than 23,000 business finance products. Our services are free to use and we’ll also guide through the application and acceptance process. So if you’re looking to raise capital for your business, apply for a Business Finance solution today or find out more with Rangewell.

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David Harrison

David Harrison

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