Starting a new business? Get 40% off our accountancy services for 3 months! 😀

x

If you are looking for new financing options or help from investors, then your business credit rating will be key to securing the funds you need. Lenders and investors want to see that your business is a safe place to put their money, and that it’s likely to be repaid with interest. Take a look at our beginner’s guide to building a business credit score.

Get your credit report

The first step is finding out exactly where the business stands in terms of its credit rating. The easiest way to do this is using a company credit report service such as Experian, or one of the many others out there.

The score is generated based on financial history, and references things like payment reliability and dependency on credit. The report will go into details about which areas need work to help improve your company credit score.

Businesses with no credit history

The report might not yield any useful data, especially if the business is still young and hasn’t yet built up enough credit data. In this case, the report may turn up your own personal credit history. This is usually the case for sole traders and freelancers who aren’t a separate legal entity to the business.

If you want to maintain a separation between you personally and your business, it’s probably best to set up a limited company and then open a business bank account. From here, you can start to build a financial history for your business that isn’t just your own.

 Startup business accountancy services

Apply for a business credit card

If the words “business credit card” strike you with fear, you wouldn’t be alone. Many people are nervous about getting into any sort of debt, and understandably so. Using a credit card is one of the fastest ways to create a line of credit and improve your rating. As long as you pay it off!

Many credit cards also come with business perks, discounts and freebies which can prove helpful.

When you apply for a business credit card, use it regularly, don’t spend the entire credit limit and pay it off as soon as you can. Try to avoid making just the minimum payment each month as this can look like you’re struggling to pay off your debt.

Keep up to date with payments

Besides your credit card, make sure that you manage any contracts you have with service providers and vendors. This means making sure you set reminders, and communicate with them when you need to.

It’s better to avoid legal proceedings where possible, especially if all it takes is a phone call. Having them on your record could damage your ability to get business finance in the future.

How are you building your business credit rating? Are you looking to apply for finance to invest? Let us know your thoughts in the comments below.

About The Author

Christopher Jones

Forensics graduate-turned copywriter and blogger. I love turning complex topics into easy to understand, yet engaging pieces of content.

More posts by this author
guest
0 Comments
Inline Feedbacks
View all comments

Read more posts...

June 2022 Client of the Month: Manea Kella

This month we spoke to Adrian Manea, architect and director at Manea Kella, a London based RIBA Chartered architecture and interior design…

Read More

Succession Planning for Business Owners: What Comes Next?

When you own a business, it’s extremely normal to feel like you’re surviving one day to the next – ‘winging it’, as…

Read More

The Accountancy Partnership – Our Positive Reviews

Here at The Accountancy Partnership, we’re proud of our customer reviews The reviews we receive from our customers show how hard we…

Read More
Back to Blog...

Confirm Transactions

The number of monthly transactions you have entered based on your turnover seem high. A transaction is one bookkeeping entry such as a sale, purchase, payment or receipt. Are you sure this is correct?

Yes, submit my quote
No, let me change it

Please contact our sales team if you’re unsure

VAT Returns

It is unlikely you will need this service, unless you are voluntarily registered for VAT.

Are you sure this is correct?

Yes, the business is VAT registered
No, let me change it

Call us on 020 3355 4047 if you’re not sure.

Bookkeeping

You only need this service if you want us to complete the bookkeeping on your behalf.

Would you prefer to complete your own bookkeeping?

Yes
No

Call us on 020 3355 4047 if you’re not sure.