Your business credit score is a key part of your financial profile. It helps lenders, suppliers, and partners understand how financially reliable your business is, and can directly affect your access to finance, trade terms, and growth opportunities.
What is a business credit score?
A business credit score is a financial risk indicator provided by Credit Reference Agencies (CRAs), such as Experian. It predicts the likelihood of a company defaulting on its financial obligations within the next year.
A low credit score indicates a higher probability of default.
A high credit score indicates a lower probability of default.
Lenders, banks, and creditors use credit scores to evaluate the risk of extending credit or trade terms to businesses, helping them decide how much to offer, for how long, and at what rates.
Why does your business credit score matter?
Your business credit score is a key indicator of your company's financial health. Think of it as your business's financial reputation: a strong score unlocks opportunities, while a lower one can create obstacles. Here's why it's vital:
1. Access better business finance
A good business credit score significantly improves your access to business loans and lines of credit. Lenders use it to assess risk, meaning a higher score often leads to:
Higher approval rates: increased likelihood of loan and credit line approvals.
Lower interest rates: save money with more competitive borrowing costs.
Favourable terms: negotiate better repayment schedules and conditions.
More options: access more business finance options.
2. Secure trade credit and supplier discounts
Suppliers check your business credit score to decide whether to offer trade credit or discounts. A strong score helps you unlock higher credit limits, access “buy now, pay later” terms to improve cash flow, and negotiate better deals like early payment discounts or extended terms.
3. Enhance partnership opportunities
Potential partners often run credit checks to assess your business’s stability. A strong score helps you win new contracts, stand out as a reliable choice, and build trust. It shows financial responsibility, which supports stronger, longer-term partnerships.
Want to know more about business credit scores? Read our Ultimate guide to business credit scores or What’s a good business credit score?