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What is a Business Credit Score?

Published on 18th February 2019 - Last update on 25th February 2019

If you’re wondering whether businesses have credit scores, the answer is yes. Also referred to a commercial credit score, business credit scores generally range from 0-100 and are used to determine the stability of your business’ finances. As such, this is a vital aspect of managing your business effectively and should be monitored on a regular basis, especially if you’re considering applying for finance in the near future. So what is a business credit score and why is it so important to your financial wellbeing?

What is a business credit score?

A business credit score is a numerical figure between 0-100 that depicts the financial wellbeing and creditworthiness of your business. As such, when applying for most types of business finance, lenders will request permission to review your score in order to assess the risk of you defaulting on your repayments and the rate of interest you will be charged. Plus, if you ever decide to make a large purchase on the basis of repaying the seller at a later date, according to a business-to-business (B2B) invoice, your credit score may be drawn into question yet again. Therefore, before making any financial decisions, you should always take the necessary time to assess your business’ credit score.

Worried about your business’ credit rating? Looking to raise funds but aren’t sure what finance solutions are available? Apply for Impaired Credit Finance or learn more about how your business could benefit.

How can I check my business’ credit score?

If you're wondering how your business’ credit score is determined, a great place to start would be with one of the UK’s leading credit agencies, for example, Equifax, Experian or TransUnion. Doing this will allow you to generate a detailed report outlining all of the factors affecting your score, giving you an indication of how it can be improved so that you’re able to gain more favourable finance agreements in the future. As such, if you’ve generated a reported or are thinking of doing so, some of the details to look at are:

  • Recent and/or past county court judgements
  • Payment performance
  • Public records such as Companies House
  • Trading history
  • The number of commercial credit cards you have open
  • Credit utilisation (e.g. frequently spending over 50% of your credit allowance)
  • Standard Industrial Classification (SIC) code
  • The number of credit enquiries that are being made by lenders

Are there loans available for businesses with a low credit score?

If you’re considering applying for business finance but have discovered that you have an adverse commercial credit rating, it can be a worrying time. After all, as well as affecting how much interest you might be charged, it may even cause your business to be cut off from certain financial products. However, all is not lost. There are some business finance solutions available where the lenders take little or no interest in your commercial credit score when deciding your eligibility, preferring to focus on other aspects instead. Therefore, if you’re eager to raise funds and ensure the success of your business, some of the products you may want to consider include Secured Business Loans, Merchant Cash Advance, Overdraft Replacement and Asset Refinance. All you need to do is source an agreement from a lender you can trust.

Looking to raise funds for your business, even with adverse credit?

As important as it may be, maintaining your business’ credit score isn’t easy. Sometimes, it may even be affected through no fault of your own. Yet, regardless of the cause, discovering that you’ve got an adverse credit rating can be a major headache, especially if you’re looking to raise funds for your business in the near future. However, although applying for finance from a traditional financial institution may prove a challenging ordeal, another way of achieving your goals might lie with the Alternative Finance industry. Providing access to a new generation of business finance products and lenders, Alternative Finance is enabling ever more UK businesses to gain the confidence they need to succeed, even with adverse credit. As such, it’s no longer a just matter of whether you can be approved for business finance but whether you can find a lender who understands the complexity of your current financial situation. Fortunately, that’s where we can help.

At Rangewell, we’ve mapped over 400 lenders to offer you an overview of more than 23,000 business finance products. Our services are completely free to use, plus we’ll also guide you through the entire application process. So if you’ve got a weak business credit score but are still looking to raise funds in support of your goals, apply for Impaired Credit Finance today or find out more with Rangewell.


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David Harrison

David Harrison

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