Your Experian Delphi score predicts your business’s risk of financial distress. Lenders use it as one of their metrics for assessing your creditworthiness. Find out how to improve it and what to do if you're struggling.
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Understanding your business credit profile is a vital part of your financial management as a small business. There are multiple different ratings and scoring systems for assessing the financial health of your business, but the Delphi score is one of the most important and wide-ranging metrics.
Let’s take a look at what the Delphi score is, how it’s calculated and what the impact of the score can mean for your access to credit and funding.
The Delphi score is a specific type of business credit score that was developed by Experian, one of the major credit reporting agencies (CRAs) in the UK and globally,
The score is designed as an analytical tool to assess whether your business is creditworthy and financially stable. It specifically predicts the likelihood of business failure or severe financial distress within the next 12 months.
Lenders, suppliers and insurers will use the Delphi scale to assess the risk of lending to you, taking you on as a customer or issuing an insurance policy.
Let’s break down what you’ll see when looking up the Delphi score for your own business (or other third-party businesses, like suppliers and B2B customers).
The Delphi score is made up of:
The Delphi score acts as a tool for lenders to judge the risks of lending to your business. A lower score of below <25 indicates a higher risk of financial problems or failure. A higher score of 80> indicates a lower risk and greater financial stability.
Here’s a breakdown showing the various risk ratings within the Delphi score:
Being rated as ‘low risk’ on the Delphi score is an indication that your business is financially stable and unlikely to fail or have serious financial issues over the next year.
But how does Experian calculate the Delphi score for your business? And what factors will the final numerical rating be based on?
The Delphi score is calculated by analysing various data points, including:
While the score is typically refreshed monthly, significant financial events can also trigger a reassessment. For instance, the filing of your annual accounts with Companies House or a notable change in your payment behaviour with suppliers can lead to an update in your Delphi score. Therefore, it is worth staying on top of your business's finances to maintain a healthy credit profile.
The Delphi score isn’t Experian’s only risk-rating score. There are other ways to assess creditworthiness and lending risk – both for the company and yourself as an individual.
Let’s look at the three main Experian risk ratings you’re likely to encounter:
Your business and personal credit scores are two distinct and separate risk ratings.
Yes, there are circumstances where your personal credit score may be factored into a lending or credit assessment. This is more common if you’re a new start-up or a business that has limited trading history and payment performance history.
New businesses don’t have a large source of historic financial data. This makes it difficult for the CRAs and lenders to assess the financial stability of the company.
Reviewing the directors’ personal credit score gives an indication of their credit profile and, as a result, their potential credit management skills.
The Delphi score was developed and is used primarily by Experian. Other CRAs like Equifax and TransUnion provide their own business credit scores and risk assessments, but don’t use the Delphi score. Each agency has its own unique scoring models and algorithms to evaluate business creditworthiness.
The Delphi score is specific to Experian and the financial institutions, lenders, suppliers and other businesses that rely on Experian's business credit data.
As we saw in the table above the Delphi score ranges from 0 at one end (a failed business) to 100 (very low risk) at the other end of the scale.
As a company, you should aim to achieve at least a medium-risk score of between 26 to 80, and ideally a low risk rating of 80>.
This low risk rating makes your business more attractive to lenders that rely on the Delphi score as part of their loan or credit application processes.
Not all lenders rely on the Delphi score, however. Some modern business finance providers, like iwoca, take a broader overview of your business finances. They will look at your online accounts, cash flow position and future cash and revenue forecasts.
Although having a good business credit score is good practice, there are lenders that will offer finance, even without a high Delphi score or business credit score.
So, how do you check your company's Delphi score? You’ll need to access your business credit report from Experian, or a service that uses Experian's data.
Let’s look at the three key ways to do this:
Experian’s My Business Profile is designed for business owners to view their own business credit score and report, which includes the Commercial Delphi score.
You can sign up for a 3-month free trial, after which there is a monthly subscription fee of £24.99. With a subscription you see your score in real-time, understand the factors affecting it and monitor any changes.
Experian's Business Express service allows you to purchase one-off or subscription-based business credit reports for your own company or others.
This credit report will give you a comprehensive view of your business credit profile, including the Delphi score.
Several other companies in the UK partner with Experian and provide platforms where you can check your business credit score. For example, Capitalise offers a business credit score service that includes the Experian Delphi score.
If you’ve checked your business credit report and the Delphi score is low (meaning high risk), don’t panic. Credit scores and financial health scores are not static – your business credit score can be improved with the right proactive action.
The starting point is to understand why your score is rated as high risk, so you have a broader awareness of what’s impacting your Delphi score (and other credit scores).
Factors contributing to a high risk-rating can include:
The most effective thing you can do to improve your Delphi score is to get proactive with prompt payment of your suppliers and creditors.
Paying people on time, keeping your credit utilisation low and making sure the data in your credit profile is filed correctly are all ways to boost your score and aim for a higher Delphi score and a lower-risk rating.
Lenders and potential suppliers will all review your Delphi score, and the lower the risk rating the more likely it is that you’ll get access to finance and trade credit.
To summarise, to improve your Delpi score, it’s good practice to:
Not all lenders are wholly focused on business credit scores and the Delphi Score.
Non-traditional lenders, like iwoca, can be more flexible when assessing your creditworthiness. If you can demonstrate that you’re an established, well-performing business, with a good path to future revenues, you can still get a business loan.
At iwoca, we have a more performance-based approach to reviewing your financial stability and creditworthiness.
You can read more about how to get a business loan with iwoca on our website.
Lenders want to know that borrowers can repay a loan if it’s offered. To be more confident of your company’s ability to meet the repayment requirements, lenders will assess your financial health, stability and future cash-flow prospects.
The stronger your Delphi score is, the more stable your business appears to potential lenders, banks and credit providers.
Lenders will be looking for:
Lenders will also want to see clear reasoning for why you need the loan, a business plan of how you’ll utilise the funding and forecasts of potential future revenue.
Here at iwoca, we know that not all businesses will have the ideal Delphi score. There are multiple factors that can result in your credit profile and business credit score being less than perfect in the eyes of the major CRAs.
But we want to help every business get the funding needed to grow. If you’re an established business with a plan for the future, come and talk to us.
We won’t fixate on your Delphi Score. Instead, we’ll look at your online accounts and cash-flow forecasts to assess whether we can lend to you.
With the right performance, you can take out a iwoca Flexi Loan and:
