Business credit scores – how to build and maintain a healthy score

A business credit score is one of the most important indicators of financial health and it plays a major role in determining access to funding. Whether it is applying for a loan, opening a new credit facility, or negotiating terms with suppliers, the score tells lenders and partners how risky (or safe) it is to do business with the applicant.

A business credit score is calculated by agencies such as Experian, Equifax, or Creditsafe and is based on several key factors:

• Payment history – whether invoices, loans and bills are paid on time.
• Level of debt – how much is owed compared to the available credit.
• Company structure – limited companies often have stronger profiles than sole traders.
• Public records – any CCJs, insolvencies, or late filings will negatively affect a score.

In simple terms:

• A strong credit score will help a business secure better interest rates, higher credit limits and access to unsecured loans or overdrafts.
• A weak credit score can limit options, increase borrowing costs and even lead to declined applications.

There are several steps a business can take to build and maintain a good credit score:

• Pay invoices and creditors on time – including HMRC obligations like VAT and PAYE.
• Keep debt levels under control – avoid maxing out credit facilities or taking on too much leverage.
• File accounts and confirmation statements promptly – late filings can harm a credit score.
• Maintain accurate financial records – keep accounts, bank statements and management reports up to date.
• Consider the operating structure – trading as a limited company often improves credibility with lenders and suppliers.
• Check credit report regularly – address errors quickly and monitor for changes.

The best advice is to be proactive:

A business should treat a credit score like an asset. They need to set reminders to review it every quarter and keep communications open with suppliers and lenders. If credit issues have been experienced in the past, a business should explain how they have resolved them when applying for finance.

It is important to note that a business credit score isn’t just a number, it’s a key that can open or close doors to growth. A strong score gives more borrowing power and better terms, helping access the funding needed to achieve business goals.

Are you looking for some help? Why not arrange a consultation with one of our business finance specialists. Call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.