Managing your Credit Rating

Did you know that moving premises could affect your credit score? How? If you don’t report it swiftly to Companies House, announce it on social media sites or register it with relevant address directories, people will start wondering whether you’ve gone bust and asking questions about your company. And if someone else takes over your previous location, your credit score could get mixed up with theirs, which may not be good.

Everyone knows that a poor credit rating affects your chances of securing funding, but it’s not just for the banks that you need a good credit score. If you want credit from suppliers or to get the most advantageous deals on your telephones or your utilities, you need a good credit rating. So how can you get and keep one?

What you Can Do

Communicate with the credit agencies. Check the information they have on you and your business to make sure it is accurate. If not, get it fixed. Ask them for tips on how to raise your score if needed.

Make all business payments on time. If this is not possible, talk to the suppliers involved and try to negotiate new terms that you can stick to. Ask suppliers for their perception of your payment history, and share aspects that make you feel proud on a blog or on social media sites.

The Historical Aspect

Do you have a good entrepreneurial history? Credit agencies look at directors and business owners and what they have already been involved with. If you are new to the business world, you may be wise to get someone else on board who can provide a solid business history.

New Customers and Suppliers

Don’t get burnt by late paying customers. Before you issue credit, you should check the credit rating of any new ones. If they don’t pay you on time, it may affect your ability to pay your debts, so you get caught in the credit score downward spiral too.

If you go to new suppliers who want you to pay upfront, make sure they are creditworthy before you part with your money. If they go under before you got what you paid for, you could be left without the supplies you are expecting. You’ll have to fork out again if they are crucial to your business and you’ll still have to wait for them, possibly putting you in your customers’ bad books for not being able to deliver on time, and other suppliers’ if you don’t have the wherewithal to pay them on time.

Your outsourced bookkeepers have lots of contacts in the business world. Ask them to let you know what they’ve heard about you, and where you should take care before committing time and money.

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