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A strong business credit score is key to better financing and growth opportunities. In this article, we’ll cover simple strategies to help improve your business credit score and strengthen your company’s financial future.
What is a business credit score?
A business credit score reflects your company's financial health and reliability. Lenders, banks, and other companies will, in most cases, review your business credit score before extending credit or offering financing.
There are several credit reference agencies in the UK who all calculate their scores slightly differently, based on their own data intelligence and research. All will take a set of similar factors into considerations around your financial results and credit behaviour. The agencies will obtain details of your company and your financial results which you file at Companies House. They will also receive information directly from banks, lenders and major companies to track your bank and credit balances and payment performance. Each agency has its own scoring scale. For example, Experian has 7 different credit score bands ranging from 0 to 100: the higher your score, the lower the perceived risk.
Why is it important to improve your business credit score?
A strong business credit score can have a direct impact on the day-to-day running of your business. Companies with higher scores are more likely to:
On the other hand, a poor score can limit your ability to grow, increase borrowing costs and make suppliers reluctant to offer credit. Improving your score strengthens your financial resilience and helps your business operate with more confidence.
How long does it take to increase a business credit score?
Improving your business credit score takes time and won’t happen overnight. Because credit reference agencies usually update their records every month, it often takes around 1 to 3 months for positive actions, such as paying suppliers on time or reducing debt, to appear in your score.
Larger improvements can take longer, especially if your business has had missed payments, defaults or a County Court Judgment (CCJ). In these cases, you may need 6 to 12 months of consistent good financial behaviour before seeing a significant change. Several things affect how quickly your score improves, including:
Progress can feel slow at times, but steady, positive financial habits will strengthen your score over time and improve your company’s creditworthiness.
How to improve your business credit score?
Here are the key steps you can take to improve your business credit score and set your business up for success.
1. Keep your Companies House information up to date and file accounts on time
Many small businesses limit the financial information which is available in the public domain by filing abbreviated accounts. However this can limit your credit score as credit reference agencies rely heavily on your Companies House filings to assess your financial stability. The less information that they have available, the more they have to assume when calculating your score. To support a stronger score, you should:
With more information available, this typically leads to a more accurate and often higher credit score
2. Make regular payments on time
Timely payments are one of the strongest indicators of financial reliability. Many large suppliers, including utility providers, share payment performance data with credit reference agencies, so your day-to-day payment behaviour feeds directly into your score.
Setting up automated payments or direct debits is an easy way to avoid missed deadlines. It also helps to stay within your agreed credit limits and overdraft facilities, as exceeding them can signal financial pressure. Even a single late payment can affect your score, so building a consistent payment routine is essential.
3. Avoid too many loan applications at once
When you apply for finance, lenders will usually record a search on your business credit file. A single application, or even a few, is unlikely to have a noticeable impact on your score. However, making a large number of applications within a short period can raise concerns for lenders and credit reference agencies, as it may suggest financial pressure or difficulty securing funding. If you're thinking about applying for a loan, try checking your business loan eligibility first before you submit an application. Or, you can speak to one of our dedicated funding specialists. They will work to find you the right lender, so that you avoid unnecessary applications.
4. Open a business bank account and use it regularly
A dedicated business bank account is important because it separates business finances from personal spending, which lenders expect to see. Consistent use of this account also creates a clear record of your business’s trading activity and financial habits.
To help your credit score, you can:
5. Consider using a credit card to improve your business credit score
A business credit card can be a useful way to build a positive credit history, provided it is used responsibly. Making payments on time and keeping your balance well below your credit limit demonstrates good financial management and helps strengthen your score over time. It’s best not to rely on a credit card for long term cash-flow needs, as consistently high balances may suggest financial pressure. When used carefully, a business credit card shows lenders that your company can manage borrowing reliably. You can read more about how use a credit card to build credit in our recent article.
6. Monitor your business credit profile to spot risks or errors ahead of time
Errors on your business credit file, such as incorrect payment records or outdated balances, can harm your score without you realising. Regularly reviewing your profile helps you spot these issues early so you can fix them before they cause lasting damage. Using your Capitalise account makes monitoring easier by showing you changes to your score, highlighting what is influencing it and sending alerts when new information is added. This kind of proactive oversight helps you stay ahead of any risks and maintain long term financial health.
7. Avoid any legal notices or County Court Judgement (CCJs)
Protecting your business credit score means staying clear of legal actions and judgments. If you receive a statutory letter or legal notice, it’s critical to act quickly. County Court Judgments (CCJs) can severely damage your credit score, remaining on your record for up to six years, even if the debt is eventually paid. However, if you settle the judgement within one month, it can be removed from your record entirely, sparing your credit from long term harm. In more serious cases, if a creditor or HMRC issues a winding up petition against your company, this will be publicly listed in the “Gazette” as a first Gazette notice for compulsory strike off. Even if the petition doesn’t progress to a court ruling, the notice will still remain visible and negatively affect your credit score.
To avoid these outcomes, never ignore “Red” letters or payment demands. Engage with creditors as soon as you receive any communication about outstanding payments. Creditors are often willing to negotiate payment plans or extensions, which can prevent the situation from escalating into legal action.
8. Build a strong relationship with your suppliers
Strong relationships with suppliers make it easier to manage payments, negotiate terms and resolve issues before they escalate. When suppliers trust your business, they are more likely to offer longer payment terms, higher trade credit limits and better pricing, all of which can support your cash flow. This stability helps you maintain consistent payment behaviour, which indirectly strengthens your business credit score. Open communication and clear expectations with suppliers create a more reliable trading environment for both sides.
Improving your business credit score for long term financial confidence
Improving your business credit score takes consistency, transparency and good financial habits, but the results are worth it. By following these eight steps, you’ll not only improve your business credit score but also position your company for long term financial success. Start today by tracking your credit score with a Capitalise account and take control of your financial health.
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