Your guide to a healthy credit score for your business

If you are considering finance for your business, you may find yourself asking how do I improve my credit score? Well, look no further, during this blog I will be spilling some top tips on how to nurse your credit score back to health.

What you should know about a business credit score

A good business credit score can be key in achieving your business aspirations. As access to finance could be the make or break for your company. Even if you don’t currently use finance for your business, you never know when you might need or want it. Finance is great if you just want to loosen up your cash flow. However, even if you prefer to use your own cash, it should give you a peace of mind having a finance option as a safety net. It is surprising how many entrepreneurs don’t check their credit score, or even know much about it!

Not to mention, a healthy credit score will also enable you to lower interest rates should you use a finance facility in the future!

Please note:

If you are a sole trader, it is important for you to know that lenders will use your personal credit score to ascertain your creditworthiness. This gives you a bigger responsibility to keep your personal finances in check. Therefore, by giving your personal credit score a bit of TLC can do your business the world of good.

How business credit score is rated

When assessing your company’s credit score, a rating is given from 0-100. 0 being the highest financial risk, 100 being the lowest.

Therefore, it should be every business owner’s target to reach as close to 100 as possible.

The rate determining factors

Payment performance

Let’s get the most obvious one out the way. As you are most likely already aware, prompt payment scheduling is one of the key components to a healthy credit score. Easier said than done though, right?

But a great way to ensure this is to manage your payments by taking full control over your budget. Creating a cash flow forecast is a great way to implement more structure upon your finances so that you can pay your bills on time.

Want to know how to cash flow forecast effectively? Read all about cash flow forecasting here.

Slap dash account filing

There is no room for cutting corners in your account filing when you want to improve your credit score. That is why it is important to file the full accounts in time and accordance with guidelines.

CCJs

Should your business have a CCJ against its name, this will be detrimental to your business credit score. But by following the guidance above, you should be able to avoid any of these in the future.

Contact Us

Are you considering a finance option and want to get a better idea of your business’ creditworthiness? Get in touch today to find out if you can get credit cleared through us. Here at Scaffold Finance, we have access to a range of funders that empower our 95% acceptance rate. So should you be refused by one lender, we will search around to try and find you the best deal.