If your business credit score is poor then your suppliers may be using this to increase your prices. It makes good commercial sense to regularly check your credit score. If you find yours is not as good as it should be here are 17 ways to improve it.
- If you fail a credit check and feel your credit rating is good then you should always challenge the result.
- Make sure your supplier is using the correct legal name on your contract or account.
- When filing your Accounts make sure they are filed in good time. Any Accounts being filed late could go against you.
- For sole traders and partnerships the credit search is sometimes run against the individual, particularly with energy contracts. Make sure that the suppliers have got ALL your personal details right
- If there has been a change of ownership or change of name within the business make sure the supplier knows about it.
- If you have had a change of legal status make sure the supplier knows this and that they can search against your personal name if required.
- If you know your credit rating is fine, but the supplier says you have failed, offer a bank reference to the supplier.
- If you know you do genuinely have a problem with poor credit rating look to use a supplier that is less stringent on carrying out credit checks.
- A Sole trader or Partners who are not on the electoral register will be marked down in a credit check
- Multiple credit checks can adversely affect your rating so if you are setting up a lot of new supplier accounts at once, all of whom will credit check the business, this can cause you trouble and should be avoided.
- Be aware, particularly with energy contracts, if you are taking on premises where the previous occupants have gone bust with debts. You can inherit the bad credit history of the address when next going through a credit check.
- Always pay on time as the payment experiences of your suppliers is a key part of your credit profile.
- Credit agencies check various sources such as online services and Companies House to confirm that your business is genuine, so ensure your business is listed in online and telephone directories.
- Include the names of suppliers who can vouch for your payment record on credit application forms.
- Beware where external debt, such as money owed to banks, is much higher in proportion to shareholders equity. This is looked upon dimly by credit agencies.
- Having a positive working capital will also affect your credit score. Credit agencies will take into account the difference between your current assets and liabilities.
- Manage your sales ledger effectively and stay on top of credit control.
