Our Guide to Business Credit Scores

Do you know what your business credit score is, and how it can impact your finances?

Your business credit score is a numerical representation of the company’s creditworthiness. In other words, how financially reliable do the big credit agencies believe your company to be?

In essence, your credit score is a measure of your risk to lenders. It’s calculated based on your company’s credit history, payment patterns, outstanding debts, and other financial data. A higher business credit score indicates lower credit risk, making it more likely for the company to secure favourable financing terms, loans, and partnerships.

How Does a Business Credit Score Affect Your Business?

Lenders, suppliers, and potential business partners use your credit score to assess your company’s financial stability. The higher your credit score, the more likely it is that you’ll be able to meet your financial obligations, honour your credit and repay any loans.

So, having a good credit score isn’t just an arbitrary financial metric – it helps you borrow money, fund your growth, and find the best customers and suppliers.

To improve your business credit score:

Pay Your Bills on Time

Paying your bills and debts punctually demonstrates that you’re reliable and improves your creditworthiness in the eyes of lenders and creditors.

Don’t Use All Your Credit

Keeping your credit utilisation low (ideally 30% or below) showcases that you’re responsible for your business finances.

Don’t Use Multiple Credit Lines

Taking out multiple credit cards and loans can be a red flag for credit agencies and lenders and could underline your credit score

Monitor and Correct Errors

If you spot any inaccuracies (like incorrect industry SIC or ANZSIC codes), rectify these as quickly as possible to improve your overall credit score.

Maintain Long-Standing Credit Relationships

Having a longer credit history often demonstrates stability and can help to boost your overall business credit score.

How Can Our Firm Help You With Your Business Credit Score?

Being proactive about improving your business credit score has multiple benefits. Lenders will be more willing to fund your growth, potential suppliers will be more willing to offer trade credit and your bank will be able to see your financial stability and offer better overdrafts etc.

As your adviser, we’ll be happy to review your current credit report and help you find straightforward ways to enhance your existing business credit score.