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What is a business credit score?

Companies have credit scores just like people do. Credit reference agencies calculate business credit ratings based on how your company handles its finances, including credit cards, loans, and even how reliable you are at paying your bills and suppliers.

The main reason to take an interest in your company’s credit score is so you know where you stand when applying for credit. The better your score, the easier (and cheaper) it could be to get credit when you need it.

Your rating is important for other reasons, too. Large companies and public bodies might check your credit history when you pitch for a contract with them, and suppliers might take a peek when figuring out their trade terms and business contracts with you.

How can you check your business credit score?

Credit reference agencies (CRAs) are the gatekeepers of personal and business credit scores. You'll need to pay one of them or an intermediary in order to see yours. For example, with Capitalise, you’ll need to pay around £24 per month to access your full Experian (one of the CRAs) business credit profile.

They come up with a score from 0 to 100 based on:

• Your payment performance to other companies
• Public data (e.g. Companies House),
• Information on County Court Judgements (CCJs),
• Data from your current account providers (e.g. credit card companies)

Only the eggheads working at CRAs know all the ins and outs of how your business credit score is calculated, and you'll have to jump through a couple of hoops to see yours.

How does iwoca’s Business Credit Check help?

Our credit analysts got together to come up with 10 questions that address the key areas of how your company’s finances are getting along. The tool is completely separate from iwoca’s credit review process, so you don’t need to worry about it affecting your chances of approval with us.

For a detailed company credit check, it’s best to turn to the companies that create credit ratings, such as Experian. But if you aren’t in the mood to get out your credit card and would prefer a fast, free overview of your company’s financial health, our no-strings tool could be perfect for you. If you're feeling inspired, you can also find out how to improve your business credit score here.

Think of this tool as a warm-up you can do before checking your credit rating in full and applying for one of our business loans:

• Flexi-loan to increase your cashflow
• Revenue Based Loan if you take card payments

It gives you a rundown of the financial factors CRAs and lenders care about when deciding if you qualify for a small business loan, plus tips on how to get the best credit terms when planning an expansion or creating a buffer for your cash flow.

More articles on access to credit for businesses:

• Why do business need finance
• Open banking

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