8 hacks for building business credit

16 Aug 2022

Your business credit profile is indicative of your business's financial health. It's a reflection of how well your business meets its financial obligations. It can determine whether you can afford to meet repayments and what interest rate you'll pay. Here are 8 hacks to help you build a positive business credit file.

Teammates high five

Before you embark on building business credit, it's important to understand what your business credit score is. If you apply for business finance, the lender will look at your business credit score to help them mitigate risk and make an informed decision.

Aside from being in the position to get finance, there are other reasons to build business credit. A good credit score could help with negotiating terms with suppliers, getting a lease on a commercial property and securing reasonable insurance premiums. 

What is a business credit score?

Your business credit score, like your personal one, is informed by your company's financial history. A business credit score typically ranges from 0 to 100, and it would be best if you aimed to score as close to 100 as possible. 

A good credit score could make it easier for you to get finance at a competitive interest rate. Missing loan repayments and making a series of failed loan applications are two examples of things that can bring down your credit score. You may struggle to get finance if you have a poor credit score or be offered a much higher interest rate.

If your credit file is less than perfect, don't give up. If you need finance for your business, there are some loan options for businesses with bad credit. Your credit score isn't fixed in stone either: here are eight ways to start building it today.

1. Check your business credit score 

Be sure to check your business credit score before applying for credit to see if anything needs to be corrected or disputed. Remember that your business doesn't have one credit score: each credit reporting company will use its scoring system. 

To find your business credit score, you'll have to request it from a credit score reporting company. They will send you your report in the post or provide you with online access. Lenders will use one of these credit reporting companies to check your score. The major credit referencing agencies in the UK are Experian, Equifax, and TransUnion.

It's essential to look after your personal finances too. If you haven't been trading for very long, lenders might look at your personal credit score to determine eligibility and terms. 

2. Open a business bank account 

One of the first things you can do to start building business credit if you haven't already is open a business bank account in your business' name. You could build your business credit by taking out credit in the form of a business credit card or a business overdraft. However, you should always ensure you can meet the repayments before committing.

Having lots of credit available across multiple accounts could negatively impact your business credit score. Consider closing any accounts you no longer need. 

3. File your taxes on time

Always aim to file your tax returns before the deadline because failing to do could give lenders the impression that you're in financial difficulty. Instead of waiting for reminder notifications, you may want to consider financing your tax bill using, for example, a business overdraft alternative or another type of business credit.

4. Pay bills on time 

Always have sufficient funds in your business account to cover your business' financial obligations. Not paying your bills and invoices on time can also negatively impact your credit score. A history of paying late or defaulting can impede your ability to get business finance and damage your credibility in the eyes of potential business partners.

5. Avoid County Court Judgments 

A County Court Judgement (CCJ) is a court order that may be registered against you if you don't repay the money you owe, and it will appear on your credit report. If you do get a CCJ, you should try to pay it on time. If your business is in financial trouble, you can find resources and support through the Government's Business Debtline.

6. Keep information up-to-date 

Conflicting information can be seen as a red flag in the eyes of business finance lenders. Be sure to update Companies House, customers and suppliers with changes to your business's essential information, such as its contact details or business status. 

7. Keep track of your partners

Did you know that your supplier's credit score can affect yours? 

Before entering into a contract with a supplier, run a credit check on them and continue doing this from time to time to avoid getting caught. Checking from the outset can help ensure you don't spend time chasing them for outstanding debt. 

8. Limit credit applications

Making lots of credit applications in a short time can imply that you're struggling to get funding, which can negatively impact your credit score. With this in mind, try limiting the number of applications you submit to lenders.

If you're looking for business funding, you can use Funding Options to see what you might be eligible for. Chosen by the government-owned British Business Bank as a designated platform to find finance for businesses, our technology accurately validates your business profile and matches you to the industry's largest lender network. 

Funding results are uniquely tailored to each and every business. What's more, you'll get expert help throughout the process. Start your business finance journey today.

Get started


Joe Morley
Joe Morley

Head of Unsecured Lending

Joe has worked in the alternative lending space since 2015. During this time he has helped hundreds of SMEs access millions in essential funding ranging from long-term asset-backed lending to short-term unsecured revolving credit lines and beyond. In his role, Joe manages and supports a large team of Credit Finance specialists.

Business Credit Cards

Check your eligibility with our online form without affecting your credit score.

Get a business credit card

Subscribe to our newsletter today

Sign up for the best of Funding Options sent straight to your inbox.