If you’re trying to get commercial financing for your business, you need a high credit score to help you land good utility providers.
Nowadays, you can find assistance, finding the good ones online or using a platform such as Utility Bidder. It promotes your business to various providers, and you could win their support through a bid.
The question is, how? Today’s discussion will let you into the world of business credit and how you can use it. Are you credit worthy enough?
What you should know about your company’s credit score?
Financial stability is not only a personal goal for someone but also a core truth for any business entity. But did you know that fixing your business credit has more than one benefit beyond the numbers in your account?
When lenders, suppliers, insurance companies, lessors, and other businesses decide whether or not to give a company credit or do business with it, they look at its business credit profile.
Credit scores for businesses differ slightly from credit scores for individuals. So, before we discuss how to improve your score, let’s first discuss how business credit reporting works.
Bureaus
The four significant bureaus in the UK that provide business credit reports are Equifax, Experian, TransUnion, and Creative.
Scale
These bureaus provide detailed information about your company’s credit history, but they also rate it on a scale of 0 to 100, with 100 being the best score.
Access
You will almost always have to pay to view your credit score and history.
Privacy
Anyone who wants to can pay to view your company’s credit report.
Relationship of Your Business Credit To Your Business Energy Contract:
If your company has:
- great credit score
- great credit history
- operates in a safe risk industry
Then, your options for an energy provider and rate will most likely be better. Other benefits for your business will be:
- Financial Quality
- Get lower rates of interest
- Get payment terms that are favourable to you
- Payless for your premium insurance.
However, some energy suppliers will not offer energy deals to businesses with poor credit scores or credit history and operate in a higher-risk industry. Others may provide inflated rates or charge a premium to account for the increased risk.
What are my options if I have poor credit and want to sign an energy contract?
Finding a utility provider willing to work with you may be challenging if you have a history of financial difficulties.
Because providing energy to businesses comes at a high cost, your energy provider understands that it may affect their bottom line if you cannot pay your bill.
In contrast to the residential market, energy suppliers can choose the commercial customers they wish to serve. As a result, they are free to limit their acceptance of customers to companies they believe will pose a low risk to their financial stability.
You can get quotes from many different suppliers in the UK.
Improve Your Business Credit
As a business owner, it’s essential to take steps to improve the credit profile of your business. When you know what information is necessary, you can do what you need to make a difference.
Pay more than what you owe.
How other companies and suppliers pay you affects your business credit profile. Paying better than terms means paying suppliers early. For example, a 100 Paydex® Score requires a company to pay on time.
Add trade experiences that aren’t being reported.
Do your business’s regular suppliers or lenders not appear in its credit profile? If so, your company’s credit profile doesn’t show how it paid for things. Make sure all of your supplier and vendor relationships are reporting.
Update the credit profile for your business.
Correct company info is crucial. Even small mistakes in your business profile can hinder loan applications. The primary business credit reporting agencies’ websites can handle disputes and fix errors.
Keep your debt-to-income ratio as low as possible.
How much your business borrows to pay for its operations is an essential factor that affects its ability to get credit. Keeping debt low shows suppliers and lenders that your business is not overstretched and is less likely to go bankrupt.
Keep an eye on the key financial indicators.
Although comparison can cause insecurity, comparing your company’s performance to others in its industry can help you improve it. Including financial indicators in your report enables you to gauge business performance.
Don’t let your credit accounts go dormant.
Using credit accounts often and paying on time will boost your business’s credit score. Building a solid business credit report means using credit wisely and paying back loans on time.
Closing remarks
No one knows more than you do about your business. Even if your business is growing and profitable, the most critical factor in obtaining credit is what appears on its credit reports.
Every small business owner should endeavour to establish a solid business credit profile. Even though it takes time to develop a positive payment history and overall creditworthiness, these five methods can help you get started.
