Your business credit score is a key factor in your company’s financial health. It can influence everything from securing funding to negotiating better terms with suppliers. A strong credit score not only improves your borrowing power but also enhances your business’s overall credibility.
Follow the steps below to start improving your credit score and unlock better financial opportunities for your business.
How to improve your business credit score
1. Pay Bills on Time
Consistently paying your bills on time is one of the most effective ways to boost your credit score. It shows lenders and suppliers that you’re reliable and can manage debt responsibly.
2. Check Your Credit Report Regularly
Errors on your credit report can lower your score. Check your report frequently to spot mistakes or outdated information, and correct any inaccuracies as soon as possible.
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Want to check your company credit report? Read our guide on how to check your company credit report for free.
3. Avoid County Court Judgments (CCJs)
CCJs can severely damage your credit rating and remain on your record for six years. If you’re struggling with payments, speak to creditors early to avoid legal action.
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If you're seeking funding, check out our guide on securing a business loan with a CCJ that's packed with tips to help improve your chances of approval.
4. File Company Accounts on Time
Late filing of your annual accounts can harm your credit score. Make sure to submit your accounts and returns on time to show that your business is well managed.
5. Limit Multiple Loan Applications
Too many loan applications in a short time can lower your score. Instead of applying everywhere, carefully research your options and apply only where you’re likely to be approved.
6. Keep Credit Utilisation Low
Using a high percentage of your available credit limit can indicate financial strain. Try to keep your credit utilisation below 30% to maintain a strong credit profile.
7. Build a Credit History
A solid credit history can improve your business credit score. If your business is new, consider using a business credit card, taking out a bad credit loan, or trade credit with suppliers and making consistent, on-time payments to establish a positive record.
8. Separate Personal and Business Finances
Keeping business and personal finances separate helps build a distinct credit history for your company. Opening a dedicated business bank account and using business credit responsibly can strengthen your business credit profile.
9. Reduce Outstanding Debt
High levels of outstanding debt can negatively affect your business credit score. Focus on gradually paying down what you owe to improve your credit rating and cash flow.
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Struggling with debt? Check out our guide on how to get free debt advice for your business.
10. Get Professional Help
If you're struggling to improve your business credit score, consider seeking advice from a financial advisor or credit specialist. They can provide tailored strategies to enhance your creditworthiness and help you navigate complex financial challenges.
Why your business credit score matters
Your business credit score isn’t just a number it’s a key factor in your company’s financial success. A stronger credit score can unlock valuable opportunities that help your business grow and thrive, including:
- Help you access business loans and credit more easily
- Lower your interest rates and borrowing costs
- Enable you to negotiate better terms with suppliers and service providers
- Increase your chances of winning contracts and partnerships
- Reduce your insurance premiums
- Strengthen your business’s overall financial reputation
The sooner you start improving your business credit score, the sooner you can take advantage of these benefits.
