Business Energy Based On Your Company Credit Score
Company managers should not forget the link between their business credit score and the price of energy. A business credit score has such an enormous impact as it will determine who your supplier may be, what options are available to you and the tariffs you can choose from. To get the cheapest business energy deal, you will want to ensure your company has a good credit rating.
What factors affect your business credit score?
There are a number of different factors that can affect your business credit score. Here is a list of some of the various factors at play that determine your company’s credit rating:
The size of your company
The size of your company is typically understood to be based on the number of employees you have. The larger your firm, the more options you have available to you, pending you’re not in large amounts of debt.
Previous bill payments
Payments made towards previous bills also count towards the overall credit score. Anyone who has struggled or failed to pay a bill on time will likely have a lower credit rating. Where possible, set up a Direct Debit to ensure that you’re not making late payments.
Applications for finance
This involves looking at the number of times your firm has applied for finance in the past. Both successful and unsuccessful applications will be considered. As you may expect, the more applications that you are accepted for, the more likely it is to increase your business credit rating, and any applications that you have been turned down for will decrease your business credit score.
If your company has joined a group, other businesses included within this group will also have an impact on your overall credit score. For this reason, it may be worth scrutinising another company’s financial records before entering into any of these collective group memberships.
The company director’s credit history
The company director’s personal credit history is also taken into consideration. If his/her credit history isn’t particularly great, this good have a negative effect on the business’ credit score. Multiple directors will mean multiple checks.
Why do commercial energy suppliers check credit scores?
How can I Improve my business’ credit score?
There are a number of ways you can improve your business’ credit score to secure a better energy deal. Here’s how:
Make sure you pay your bills on time
Paying your bills on time, whether its loans, utility bills or other business costs, is one of the quickest and easiest ways to improve your company’s credit score. Those that are unable to pay their bills on time will learn that their credit score will suffer as a result of this. No matter what else you try, other businesses will deem you as a high-risk client and may not want to work with you in the interim.
Establish credit accounts with suppliers
Some companies will work with specific suppliers on a regular basis, and here we’re not just referring to gas and electricity suppliers either. By building a strong and healthy relationship with these suppliers, you could establish a credit account with them which can help your credit file show these positive payment experiences.
Add positive payment experiences to your credit file
It should be noted that not every supplier or vendor will disclose payment data with business credit reporting agencies. However, you should be able to add trade references to your company’s credit file manually through the credit reporting agency. Add as many positive payment experiences to your credit file as possible, this will really help you out in the years to come and should raise your business credit score.
Dispute any errors or false inquiries
If there are any errors, false inquiries or negative feedback on your file, you will in fact be able to work with credit card companies and credit reporting agencies to get these removed. This will ensure that your file is accurate and up to date without any discrepancies. If the previous information is incorrect or no longer relevant, your credit score will certainly benefit once the amendments have been made.
Lastly, if you are in business energy debt for whatever reason, check out our guide on the subject and find out how to free yourself of this.