5 ways to get a healthy credit score for your company

In this post, we’re going to look at some things you can do to ensure that your company’s credit rating is as healthy as possible. But before we dive into that … What is the credit rating?

A credit rating (or credit scores) is simply an indication of the likelihood of the business facing financial difficulties.

The score is based on a company’s overall credit history and takes into account a number of variables such as financial history, current assets, liabilities, and auditors information to name a few.

The credit rating is not universal but specific to each credit rating agency. While credit ratings from different agencies will most likely be very similar, they will not be the same, as each agency will have their calculations on how to measure credit rating.

The algorithm that determines a company’s credit score is pretty complex, taking numerous factors into account – some of these things you will be able to affect, some you won’t.

For example – the geographical location of your business will have an impact on your score, but we hardly expect you to relocate to a part of the country more associated with success!

Likewise, the age of your company and the industry that you operate in has an impact, but again there’s not much you can do about that. There are things you can do, however…

5 ways to ensure you have a healthy credit score

Run a healthy company – Okay, it’s obvious but the most important thing to do is to run a profitable business with minimal debts. Be mindful of taking out large loans and mortgages as these will have a detrimental impact on your credit score.

Make payments promptly – If you fail to make a payment your company could have a County Court Judgement (CCJ) placed against it. This is a court order that highlights that you or your company owes money – and the fact that you have a CCJ is public information. Unsurprisingly, this isn’t good for your credit score. Make payments promptly to keep CCJs at bay.

Pick company appointments with care – You should only work with the best. Not only will this help your company achieve great things, it’s also a plus for your score. This is because the previous activity of directors, shareholders and secretaries can all have an effect. Far better to collaborate with a successful director than one with a somewhat blotted past.

Don’t chop and change – Making changes to a limited company is extremely simple, with updates to directors, the registered office and even shares possible in just a few clicks. However, constant tweaking to your company can give the impression of instability. Therefore, before you make any updates, consider how necessary the change really is.

File your confirmation statement and annual accounts on time – A limited company has two filing obligations; the confirmation statement and annual accounts. Even if a company has never traded (and so is dormant), they’re still required. It’s key to your credit score that you file both of these on time.

Do you know your company’s credit rating? Find out how lenders see you! Search for your company report now.

We hope you have found this post helpful. If you do have any questions about company credit scores, company credit reports and anything else related to Company Search MadeSimple, simply respond to this email and we’ll be happy to help.