How to check your business credit report

Your business credit score shows how creditworthy your business is. You can find your score and how to improve it by checking your business credit report.

How does a business credit report work?

When you apply for credit for your business, such as a loan or business credit card, the lender reviews your business credit report to assess the risk of lending to your company. This is one of the factors it uses to determine whether it will offer you credit and, if so, what rates to offer.

The riskier a lender perceives your business to be – in other words, the less confident it is in your ability to repay the loan – the less likely it is to approve your credit request. Additionally, lenders often charge higher interest rates to such businesses to compensate for the increased level of risk they are assuming.

Your business credit score isn’t just important for getting credit. Investors also use it when deciding whether to invest in your company. The same applies to other businesses – they use your credit score when considering whether to work with you. This could be as a customer, supplier or partner. 

Likewise, you can check other companies' credit scores when deciding whether to work with them.

There are a number of business credit reference agencies in the UK, including:

• Credit Passport

• Creditsafe

• Dun & Bradstreet

• Equifax

• Experian 

These agencies build your business credit report by collecting information from various sources. Each one has its own method of calculation. 

How to get your credit report

You can request your business credit report through the agencies’ websites. They all offer a free option. Alternatively, you can pay for a subscription for more features and insights, such as ongoing access to your report and alerts when your score changes.

For example, Experian’s My Business Profile service gives you your credit score in real-time, allowing you to see what’s affecting it and how to improve it.

What information does a business credit report include?

Business credit reports usually contain the following information:

• Business details, such as name, address, company number and date of incorporation

• Financial information the company has filed with Companies House, including its balance sheet, profit and loss statement, capital and reserves and cash flow

• Details of any CCJs (county court judgements for non-payment of debt) or bankruptcies 

• Payment history, such as whether the business has paid all its bills on time or whether there were late or missed payments

• Details of directors and shareholders, including any connections they have with other companies

What credit score should you have?

Different credit reporting agencies score businesses differently, so what counts as a good score varies.

Experian’s scores range from zero to 100 – the higher the score, the better your credit rating and the lower your risk. Experian scores typically indicate the following:

• 80 or over – low risk. Companies with this score can access the best credit deals and are more likely to get the loan or investment they apply for

• 40 to 80 – medium risk. Businesses in this range may need to submit additional information to a lender to convince it of their creditworthiness

• 40 or below – high risk. Firms ranking this low may not be able to get credit. Other businesses may also be wary of working with you 

Creditsafe, Dun & Bradstreet and Equifax also score businesses out of 100. Credit Passport scores go from A++ to E, with B or above being a decent score.

How to improve your business credit score

Your credit score affects your business’s ability to grow and thrive, so it pays to take steps to ensure it’s the best it can be. There are several ways you can do this:

• If you’re a limited company, you should file full rather than abbreviated accounts with Companies House each year in accordance with the guidelines

• Pay all your bills on time to avoid late payments being recorded on your credit report and receiving CCJs. Ensure you have enough money in your account to cover any payments you make

• Keep Companies House up to date with any changes to your business details, such as your registered address. Also, notify any companies you work with

• Use business finance rather than personal credit when starting out. This will help lenders get a picture of your business’s creditworthiness by building your credit score. You should also use a business bank account rather than a personal one

• Check your eligibility for credit with lenders before applying. This will prevent them from performing a credit search on your business, which is recorded on your credit report, potentially damaging your score

• Avoid making lots of applications for credit in a short space of time. This results in multiple searches on your report, which can make lenders think you’re struggling financially

• Regularly check your business credit report so you can quickly spot any issues you need to address

• Keep an eye on the credit scores of businesses you work with. If they get into financial difficulty, it could affect your business too

• Build good working relationships with your suppliers, so they provide credit reference agencies with positive information about you

Is your business credit score different from a personal credit score?

Yes. Lenders use both business and personal credit scores to check creditworthiness, but the two report types show different things. Your personal credit score focuses on your individual ability to repay debt, while your business credit score reflects how well you manage company credit. 

However, in some situations, such as when your business has yet to build up enough of a credit history, lenders will take your personal credit score into account when assessing an application for business credit. This is why it’s important to take steps to keep both your business and personal credit scores healthy.