Funding the growth of your business isn’t just about having money in the bank,it’s also vital that you can access additional funds, when needed. Your business credit score can be a major factor in this ability to access finance. But how do you check your business credit score? And how is this metric measured?

Let’s explore what a business credit score is, how you find out your score and some key ways to improve your creditworthiness as a business.

What is a business credit score?

Having a good business credit score is a major advantage for your finances. It can be the difference between a loan application being approved, and your request for a loan being turned down. But how does the scoring system work? And why is it such a crucial metric for banks, lenders and finance providers? 

How does a business credit score work?

A business credit score is a measurement of your ‘creditworthiness’. This is your ability to meet the conditions of a loan and pay back the money that’s been borrowed. 

It’s measured by one of the major credit reporting agencies and will usually be given on a scale of 0-100. The better the score, the healthier your credit rating.

In essence, your business credit score is an indication of how risky you are to lend to. 

Why is a good business credit score important?

The importance of your business credit score can’t be overstated. 

A healthy credit score is your key to business loans, bank overdrafts and credit agreements with your suppliers. A poor credit rating can close these funding doors, leaving you without the ability to borrow. This can be a severe financial limitation and can restrict your growth plans and ability to trade. 

How is a business credit score calculated?

Banks and lenders want to understand the level of risk they’re entering into when lending money to a business. To do this, they rely on a business credit score, supplied by the major credit reporting agencies (CRAs). 

CRAs and credit platforms have access to publicly available financial and industry information for your business. This is used to analyse your credit risk profile, your ability to repay a loan and your overall business credit score.

Factors the credit agencies will look at include:

• Your payment history to suppliers and lenders
• Your credit utilisation and outstanding debts
• The length of your credit history
• Public records regarding bankruptcies and county court judgments (CCJs) etc.
• The size and age of your company 
• Risk factors in your industry or sector

What’s the difference between personal and business credit scores?

It’s important to understand the distinction here. 

A personal credit score looks only at your personal finances and credit history. It’s a measurement of your creditworthiness as an individual.  

A business credit score looks at your company finances, transactions and borrowing. It’s your company entity that’s being reviewed, not your personal credit background. 

For established limited companies, your personal credit score does not directly affect the company's credit score. Your company builds its own independent credit history.

However, if you’re applying for initial funding as an entrepreneur, or giving a personal guarantee on a business loan, your personal credit score may be factored in. 

How to check your business credit score

We know the importance of a business credit score and the impact it can have on your creditworthiness. But how do you check your business credit score?

Let’s run through the process of finding your current credit score, and what this tells you about the health of your finances and ability to borrow

1. Find a credit reporting agency or platform: There are three main UK credit CRAs: Equifax, Experian and TransUnion. Each platform offers different insights and scoring methods, so it’s worth subscribing to multiple services to get a comprehensive view of your credit status. Other credit score platforms are also available, such as Dun & Bradstreet (D&B). Some platforms, like D&B, use their own business data. Others, like Capitalise, will partner with a major CRA to power their scoring tools (Experian, in this case).
2. Provide your business details: To start the process, you’ll need to give some detailed information to the CRA. This will include your registered company name, Companies House registration number, Unique Tax Reference (UTR), registered office address and your trading history. 
3. Make sure these details are correct: It’s vital that the business details you enter are accurate. Any errors in these details could lead to your credit report giving incorrect results or missing out key bits of information.
4. Verify your identity and business ownership: You’ll go through a verification process to prove your identity, and your authority to access the business credit information. This will typically include your photo ID, proof of address and documentation showing your position within the company.
5. Access your report through free or paid options: You’ll be able to choose between basic, free credit reports, or comprehensive paid subscriptions that offer more detailed insights, monitoring and updates. Paid services will generally have added extras like recommendations for improving your credit score, competitor analysis and alert systems for changes in your score.

Can you check another company’s business credit score?

Yes, some CRAs and credit platforms have the option to run business credit reports for other third parties. This can be particularly useful when you’re taking on a new business customer, or want to check out a new supplier.

Running a third party business credit check lets you:

• See their company payment history
• Understand their overall credit rating
• Decide if their risk profile makes them a good company to partner with

Free vs paid business credit score checks

Being able to check your business credit score for free is definitely helpful. It gives you a basic understanding of your score and whether you’re rated as high risk, medium risk or low risk on the CRA’s given scale.

But a free business credit score check might not give you all the detail and insight you need. Sometimes, it’s advisable to opt for the paid subscription service and to get the full breakdown of your score, credit rating and benchmarking.  

Here’s an overview of the key differences:

• Free Tools: Some credit bureaus will offer free reporting once you sign up to their platform. This is helpful, but the information will be limited. Free reports are only suitable for basic credit checks, where you want to quickly get a feel for your credit score.
• Paid Services: Most CRAs and credit platforms will offer two ways to get deeper credit information. You can buy one-off credit reports, or you can subscribe to an ongoing monthly service. Paid-for reports will give more detailed insights into your credit, while subscriptions will offer additional benefits, like monitoring tools, credit alerts and customised recommendations.

Where can you check your business credit score?

To help you find the best CRA or credit platform for you and your business, we’re going to run you through five of the most popular options for UK businesses. 

Each of these options has its own scoring systems, services and approaches to monitoring and improving your business credit score. The key is to find a solution that offers the reporting and tools you need, at a price point within your budget.

Experian Business Credit Score

Experian is one of the leading CRAs in the UK, providing consumers, businesses and lenders with comprehensive credit information and analysis. 

Key Points:

• Credit services: Sign up to Experian’s My Business Profile service to get access to your business credit score, find out what’s affecting your score and get preferential credit applications as an Experian member.
• Is it free? You can sign up to My Business Profile for a free 3-month trial, giving you access to all the business credit tools and reports. 
• What’s the price? A subscription to My Business Profile will cost you £24.99 + VAT per month, once your free trial expires.

Equifax Business Credit Score

Equifax is another major CRA in the UK, providing detailed credit reporting for both the consumer and business sectors. They offer personal credit reports alongside comprehensive credit reports for the business community.

Key Points:

• Credit services: Equifax offers a service to run a business statutory credit report for your own business. You can also run commercial credit reports to check the credit risk and financial history of new customers and suppliers.
• Is it free? The business statutory credit report is free to apply for. But you’ll need to pay for third-party company reports giving credit information on customers, suppliers and other stakeholders or competitors. 
• What’s the price? Prices are not quoted on the Equifax site, but one-off reports are likely to be between £25 to £50 per report. 

Dun & Bradstreet Business Credit Score

Dun & Bradstreet (D&B) is not a CRA, but has a global database of its own business data and industry insights. As a business specialist, D&B can give you an extremely detailed overview of your credit rating and payment history.

Key Points:

• Credit Services: D&B offers both a free and a paid version of its Credit Insights solution, giving you either a basic overview of your credit score, or fully featured insights into every aspect of your credit rating. The CreditSignal® tool also offers free notifications when your ratings change.
• Is it free? You can sign up for the free Credit Insights package to get a rating of your overall business risk, notifications and trade payment summaries.
• What’s the price? The paid version of Credit Insights costs £245 + VAT annually, but adds extra features like your failure score, D&B rating, PAYDEX® score and your maximum credit recommendation. 

Capitalise Business Credit Score 

Capitalise is a business finance hub that also offers a business credit score service. The platform allows you to analyse your creditworthiness as a first step in applying to business finance providers and alternative lenders.

Key Points:

• Credit services: Capitalise’s business credits score tool is powered by Experian and offers you a range of credit metrics and ratings notifications. You can check your score, get insights into the factors affecting your credit rating and get alerts when your key credit metrics change
• Is it free? There is a free version of the Capitialise business credit score solution. This gives you a basic overview of your score, risk factors and tips on how to improve your credit rating. 
• What does it cost? There are three paid-for versions, Startup, Pro and Enterprise, that add additional detail to your credit reporting, tailored to fit the size and type of your business. Prices start from £19 + VAT per month

Government and Local Resources

There are no specific business credit score tools provided by the UK government.  However, there are initiatives in place to improve the accessibility and transparency of the business credit information you can find about your business:

• Commercial Credit Data Sharing (CCDS): The CCDS initiative makes it mandatory for the major UK banks to share the credit information of their business customers with the main CRAs. By improving the availability of credit data, businesses improve their ability to access business finance and lending.
• British Business Bank: The British Business Bank offers guidance and resources to help SMEs understand and improve their creditworthiness. It doesn't provide direct access to credit scores, but it does support initiatives aimed at boosting the financial health of small businesses, like yours.
• Statutory business credit reports: There’s a legal requirement for the main CRAs to supply statutory credit reports, when requested by consumers or businesses. These are basic reports that don’t go into huge detail. But they do give you an initial overview of your credit score and risk rating.

Tips for monitoring and improving your business credit score

To improve your business credit score, it’s important to have strategies in place that will reduce your risk, revitalise your financial health and boost your creditworthiness. 

Here are some practical tips for getting your credit score up to speed:

1. Pay your bills on time: Being organised and professional about paying your suppliers is vital. Being timely about settling the bill, and doing it within your suppliers agreed terms, helps to improve your historic payment performance.
2. Monitor your credit regularly to spot errors: Small errors can make a big difference. Make sure you’re listed using the correct Standard Industry Code (SIC). Using the wrong SIC can lead to incorrect assessments of the risks in your industry – and a negative knock-on effect on your credit score.
3. Use credit responsibly by maintaining low utilisation: Your credit utilisation ratio measures how much your business is borrowing, compared to the total amount you’re allowed to borrow.  A low ratio improves your business's credit score by demonstrating that you’re only using a percentage of the full amount available – i.e. that you’re being responsible with the available credit. 
4. Establish trade credit relationships with your suppliers: Agreeing to credit arrangements with your suppliers is a great move for extending your cash flow and paying bills further down the line. But it also helps you to build up a good credit history, showing that you can build credit relationships and successfully pay off this credit at the agreed time. 

How iwoca can help

At iwoca, we support the ambition, growth and success of the UK’s small businesses.  Whether you need funds to invest in new equipment, or capital to expand your team, we’ll help you build on your credit profile to access these additional funds.

Here are a few ways we help you refine your credit and financial position:

• Flexible financing: our flexible business loans help you manage your cash flow, meet your financial obligations and invest in the next chapter of your business.  Repaying these loans on time helps to credit performance and credit score.
• Educational resources: the guides in our Resources section give you the lowdown on credit, loans and improving your business credit score. Learn about prompt payment, avoiding CCJs and building a credit profile. 
• Credit assessment tools: we’ve partnered with CRIF to integrate Credit Passport into our lending platform. Powered by open banking, this credit profile fills out your loan application form, searches for documentation and gives you instant decisions on whether the loan will be approved. 

Explore our business finance options and start borrowing, investing and building a healthy credit profile for your business. 

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