Improve Your Business Credit Score
- Get a credit improvement action plan personalised to your business
- Understand each section of your businesses credit report
- Learn how the information on your credit report affects your business credit score
Has your business found itself struggling to obtain credit? Ever since the Corona pandemic has swept through the UK, suppliers, banks, investors and even small business loan providers have become increasingly reluctant to lend to businesses with low credit scores. It is much less risky for them to lend to companies with a great credit rating. So how do those businesses with low credit get access to suppliers and investors? Cashfloat, the brand name for short-term loans has now expanded and wants to help those businesses by offering a credit repair service. We want to help your business thrive, right from the core of your business – by repairing your business credit!
What is a business credit score?
As an individual, you most likely have a personal credit score. Your personal credit score measures your creditworthiness which allows lenders to assess your ability to repay credit. Similarly, your company will have its own business credit score. Credit agencies like Experian, Equifax and Transunion score between 300 and 999. They use information from your business credit report to calculate your business credit score. That score will portray how financially accountable your business is.
What does a business score measure?
The information recorded on your business credit report differs with each credit reference agency. However, there are some areas of your credit report that will appear on all credit reference agencies reports. These are some of the factors which your business score will measure:
- Payment history: Has your business paid bills on time? Were your debts ever sent to collectors?
- Existing debts: What loans or credit cards do you currently have under your business name? How long have you had them?
- Credit utilisation ratio: Of your available credit, how much are you using? Understand more about credit utilisation here.
- Recent credit inquiries: Have you recently applied for credit? How often?
- Public records: Have you had any bankruptcies, liens, or legal judgements against you?
- Size of company: How many employees do you have on your payroll?
Why should I check my business credit score?
Being on top of your company’s credit score is very important, especially now during the pandemic. Investors and suppliers are thinking twice before doing business with any company, and having a good credit score will boost your chances of getting affordable credit. It’s a good idea to check your company’s credit score monthly, depending on how much stock you are purchasing on credit and your loan requirements. If your company’s credit score is low, you might consider using a credit repair service.
How can I improve my business credit rating?
Just like improving your personal credit score, there is no secret formula that will improve your business credit score overnight. Keeping your eye on your business credit score and ensuring it doesn’t get out of hand, is the first and most important step to improving your score. To help you with improving your credit score step by step, we’ve laid out 10 practical ways you can improve your business credit score.
- Register your business properly.
Your business should be fully on the books, set up and registered with all the relevant agencies. If your business is not registered properly, you may have a hard time convincing lenders and suppliers to lend to you on credit.
- Ensure your payments are made on time.
This is one of the most effective ways to boost your business credit rating. Consider even paying your bills earlier than they are actually due.
- Open business lines of credit.
Demonstrating you can manage credit responsibly will improve your credit score. Begin by getting 2-3 lines of credit, use them and pay back on time. If you are using them and managing them well, then get more.
- Ask your vendors to report payments.
Credit bureaus base your credit score on information they have reported to them. If you make payments on time, make sure your vendors are sharing data on your payment records.
- File on time.
Submit your accounts and tax returns on time. If you file late, it can be an indication of financial problems.
- Limit your credit applications.
When enquiring about finances ask for quotes instead of making full applications.
- Keep your information up to date.
Ensure customers, suppliers, CRAs and directories are all up to date with any changes to your business location or status. Out of date information may make your business look unprofessional
- Keep on top of your personal finances.
If there is little information about your company, (for example, if your company is a startup), then data on the business owners or directors credit report may be used to indicate creditworthiness. If you are looking to improve your own credit score, check out the consumers credit repair page.
- Look out for data breaches.
There’s nothing worse than having a perfect business credit score and then watching it all crumble because of one unfortunate data breach. Be proactive and protect yourself from fraud. Report any errors to the relevant agencies, as soon as you see them.
- Use a credit repair service.
If your company is suffering from a bad credit rating, it can be very beneficial to get help from a credit repair service. In the next paragraph, we will explain how a credit repair service can help your business.
What does a business credit repair service do?
A business credit repair service has one goal in mind: Repair your company’s credit rating to help your business get access to better credit options and more suppliers. A business credit repair service will help you keep on top of your credit rating and will show you how you can improve your score by giving you goals to work on tailored for you. Once your credit has improved, investors will be more likely to invest in your business, and suppliers will want to supply you with stock on credit.
Why choose Cashfloat to help repair your business credit?
Cashfloat has been known now for a long time as the leader in the short term credit industry. We know what investors, banks and suppliers are looking out for when you apply for credit with them. Therefore, we have decided to branch out our expertise and help consumers and businesses with repairing and building their credit profiles. Thousands of people in the UK have trusted us with their online loan needs. Now, let us help your business begin repairing its credit rating.
What is a credit check?
A credit check (also known as a credit search) is when a company looks at your credit report to understand your financial behaviour. They will check to see how much credit you currently have, if you pay back credit on time and how you are managing your credit. Companies will conduct a credit check on your business when you apply for credit or you want to get stock on credit.
What is a thin file?
If your business is new to the scene, your credit file is likely to be thin. This means your business’s credit file simply lacks information and there is not enough detail for a potential lender or supplier to assess your ability to repay loans or your ability to make payments after a stock delivery is made.
How long does bad information stay on my business credit report?
Depending on what the bad information is, it can stay on your credit report for 1-15 years. This chart will help you understand how long bad information will stay on your credit report:
|Credit searches||1 year|
|Defaulted Debts||6 years|
|Individual Voluntary Arrangement||6 years|
|County Court Judgements||6 years|
|Debt Relief Orders||6 years|
|Late Payments||6 years|
|Bankruptcy||6 or 15 years|
Do business credit cards build credit?
Having a business credit card can help to build your business credit. Apply for a business credit card and use it responsibly by paying your credit card bill every month on time. You should see your business credit score improving as a result.