How to Find Your Business Credit Score

Borrowing money is an essential tool for entrepreneurs to fund and grow a small business. But taking out a business loan, getting an overdraft, or applying for trade credit is usually reliant on your company having a good business credit score.

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What is a business credit score and why does it matter?

A business credit score is a measurement of your creditworthiness as a business. It’s an assessment of your ability to pay back a loan, and a measurement of how risky it is for a bank or finance provider to lend you money. 

Credit agencies, like Experian and TransUnion review your payment history, statutory accounts etc. to assess the potential risk you pose to a lender. They then issue a score that shows whether you’re rated as high-risk, medium-risk or low-risk.

What’s a good business credit score?

Lenders, suppliers and insurers want to see a good business credit score that demonstrates that you’re a low-risk borrower. 

There are several different scales used to measure business credit scores, but a common scale, as used by Experian, will give you a measurement from 0 to 100, with 0 being the highest possible risk and 100 being the lowest risk.

Using the Experian scale:

• High risk (Poor) = 40 and below
• Medium risk (Fair) = 40 to 80
• Low risk (Good) = 80 or above

How does a strong business credit score improve your ability to access funding?

A strong business credit score is a sign that you’re a stable, viable business. You’re capable of taking on finance, meeting the repayment schedule and not defaulting on the loan. If you can achieve a score of 80+, this will open up borrowing and lines of credit to you – all of which puts you in a stronger financial position as a business.

• Banks will happily grant you an overdraft. 
• Specialist lenders won’t hesitate to agree to a loan agreement. 
• And your suppliers will gladly offer trade credit to you.

Having a good business credit score is more than just a number. It’s a key that opens up funding options, additional capital and a strong financial position for the business.

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How do you find out your business credit score in the UK?

It’s vitally important to find out your business credit score. This metric can inform your strategic decision-making and your ability to source the funding you need.

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Let’s take a look at how you can access your score:

1. Identify the Main CRAs (Credit Reporting Agencies):

The first step is to get familiar with the different credit reporting agencies, credit bureaus and business credit score platforms.

Experian, Equifax and TransUnion are the three major credit reporting agencies (CRAs) in the UK. However, there are other credit bureaus, like Dun & Bradstreet, and online business finance platforms, like Capitalise, that give you ways to find the business credit score for your organisation. 

These CRAs, bureaus and online platforms gather data and publicly available information about your business, allowing them to generate a risk rating. 

2. Access Your Business Credit Report

The next step is to choose one or more CRAs/bureaus and to request your business credit score. This may be free, or may require a subscription.

For example: 

• Free options: Some CRAs offer a basic business credit score check for free. This will give you your overall score, but there’s likely to be limited information and very little detail around the risk elements that make up your score.
• Paid subscriptions: To get a more comprehensive business credit report, you'll typically need to subscribe to the provider’s credit rating services.  With a subscription, you’ll get detailed insights, ongoing monitoring and notifications.
• Online platforms: Several online platforms, like Capitalise, partner with CRAs to provide access to business credit scores and reports. These will often have additional features and tools to help improve your credit score.

3. Understand Your Credit Score:

Each CRA and bureau has its own scoring system, so there’s no universal scale to measure your score. Some use a 0 to 100 scale, others use a 0 to 1000 and some use the FICO and VantageScore 3.0 scales, where a 300 to 850 scale is the norm. 

Generally, higher scores indicate better creditworthiness and a lower risk as a borrower. Lower scores denote poor creditworthiness and a higher risk.

It’s a good idea to get your score from more than one CRA or bureau, so you have a broad and wholly objective overview of your creditworthiness.

Your business credit score is influenced by multiple factors. These can include:

• Payment history: CRAs will look at your past payment performance and how long it takes you to pay you suppliers, creditors and lenders. Fast payment is a good sign, whereas slow payment could indicate poor creditworthiness. 
• Financial performance and cash flow: Your statutory accounts can indicate whether the company has good capital behind it, or whether cash flow is unstable and unpredictable. CRAs can gauge your overall financial health (and ability to pay off a loan), based on this information.
• Public records: Having Country Court Judgements (CCJs) against the company for failing to pay a bill can have a major impact on your credit score. A history of insolvency and bankruptcies will also act as a major red flag to the CRAs – and will be reflected in your credit score.
• Industry risk: The wider risk of lending to businesses in your industry or sector will also be taken into account. Companies in industries with tight margins and poor cashflow, such as construction, are likely to be given higher risk ratings than businesses in stable industries, like energy utility firms. 

Understanding the interplay between these multiple factors allows you to understand the potential ways to improve your business credit score and boost your risk rating.  

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Where to access your business credit report: top UK providers

Let’s take a look at the major UK business credit agencies and how you can find a business credit report for your business. 

1. Experian

Experian offers the My Business Profile service which includes access to your business credit score and other financial information about your business. You can sign up to My Business Profile free for the first 3 months. It’s then a £29.99 monthly subscription to access your score, monitoring and credit notifications. 

2. Equifax 

Under the Consumer Credit Act (1974) and the General Data Protection Regulation (2018), you have the right to access a copy of your credit report information produced by any of the CRAs. 

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Equifax offers a free statutory business credit report for companies that gives you a basic view of your score and risk rating. For more detailed information, you can also use the paid-for Commercial Credit Reports service that allows you to request credit information on both your own business and company information on your suppliers and customers. 

3. TransUnion

TransUnion does offer personal credit scores and statutory credit reports, but doesn’t offer a business credit score service for UK customers. 

4. Dun & Bradstreet

Dun & Bradstreet (D&B) offers two different ways to access your business score through their Credit Insights service. There’s a free subscription service that gives you the most basic overview of your overall business risk. And there’s also a paid Credit Insights subscription that costs £245 per year and gives you additional metrics such as your D&B rating, your PAYDEX® score and your failure score.

5. CreditSafe

CreditSafe uses data from a CRA partner to offer company credit reports, both for your own business and for other third-party companies. This allows you to check your own business credit score in real-time, but also to check the risk ratings of potential suppliers, customers and other business partners, before you enter into credit agreements or partnerships.

6. Capitalise

Capitalise is a business finance comparison site that also offers business credit reports, powered by Experian. You can subscribe to their credit score service to find out your business credit score, the factors influencing the score and get notifications if your score changes. Prices for the subscription start from £19 per month, with a range of different packages to suit your business needs and company size.

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How do you improve your business credit score and boost your funding chances?

Once you know your business score, and how it compares with other companies in your sector, the next step is to get proactive about improving and refining this score.

Your risk rating and credit score are not static figures. There are ways to enhance your financial health, improve payment performance and use credit in sensible ways to move your score from high risk to medium risk, or even low risk.

Here are three key ways to improve your credit score:

1. Pay your invoices and debts on time: Consistent, on-time payments are vital for improving your credit score. Get your invoicing system up to date, use Direct Debits and talk to your creditors early about any potential payment issues. Keep accurate payment records and make sure you prioritise important bills.
2. Reduce your credit utilisation and increase credit limits: Keep the balance on your company credit card low (ideally under 30% of your limit) and pay down existing debt ASAP. It’s a good idea to request credit limit increases, so you lower your credit utilisation ratio. And avoid taking out multiple lines of credit with different providers – this is a major red flag for the CRAs.
3. 3. Keep your company accounts up to date: Accurate accounts and financial reports show you’re a stable and well-managed business. Keep detailed records, generate regular financial statements and make sure you file statutory accounts with Companies House on time. It’s a good idea to work closely with an accountant and business adviser too, to keep your finances in check. 

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Does your personal credit score affect your business credit score?

The short answer is, yes. As a director, when you apply for business finance, lenders and CRAs will look at your own personal credit usage and credit score. 

This is especially likely if you’re a new start-up or a business with minimal payment and credit history. CRAs are likely to place more weight on your personal credit score in these scenarios, to gauge whether your business has a heightened risk of defaulting on the debt. 

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A) Are sole traders and limited companies rated differently? 

Yes, your personal credit score will be treated differently, depending on whether you’re a sole trader or a limited company. This comes down to the legal structure of the business, and whether you and your company are seen as separate legal entities.

For example:

Sole traders: 

As a sole trader, there’s no legal distinction between your own personal money and the equity you have in the business. 

You and your business are one and the same thing. As such, CRAs will want to assess your personal credit history to review your creditworthiness and to make decisions on the risk rating of your business.  

Directors in limited companies: 

As a director, you and your limited company are two distinct legal entities – this is why you have ‘limited liability’. 

Your own personal money, and the capital held in the business, are two entirely separate things. Because of this legal distinction, CRAs are less likely to review your personal credit score when giving a risk rating for the business. However, start-ups and companies with limited credit histories may find personal credit scores being taken into account.

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B) How can you separate your personal and business credit history?

There are steps you can take to minimise the need for your personal credit history to be taken into account by CRAs and lenders.

For example:

1. Formalise your business: Get incorporated as a limited company to create a separate legal entity that’s distinct from you and your personal finances. This separates your personal money and business capital.
2. Establish your business Identity: Request a company registration number (CRN), register with Companies House and open a business bank account. This helps to establish your business as a formal entity for tax and legal purposes.
3. Build up your business credit: Get a business credit card and use it responsibly to show you can build up credit. You can also establish trade credit with your suppliers, and think about taking out small business loans. 
4. Manage your finances well: Keep accurate financial records, run regular financial statements and pay all your bills on time. Keep credit utilisation low and work with an accountant for sound financial management.
5. Monitor your business credit score: Check your business credit reports regularly, track your progress and understand your risk rating. Make sure to check for errors and that you’re registered under the right SIC code. 

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Fast decisions on lending: that don’t rely solely on your business credit score

The Big Four banks and the major business lenders will want to see a good business score before agreeing to lend to you. 

Here at iwoca, we know that there’s more to your business than just your credit score.

When you apply for a small business loan with us, we’ll review your credit history, but we’ll also look at your VAT returns, your financial statements and your cloud accounting ledgers to get a more rounded picture of your finances.

With iwoca:

• You can apply for a loan online in minutes
• We’ll give you an answer on your loan application within 24 hours
• Borrow anything from £1,000 to £1,000,000
• No early repayments fees and interest only charged on funds you draw down

If you’re a new start-up, or a business with limited credit and payment history, an iwoca small business loan is your perfect route to funding.