Credit ratings

Learn why it's important to have good credit.

Explore our Debt Advisory services

We can help you navigate the lending process, clear up some often asked questions, and collaborate with you to make sure your future cashflow needs are properly met.

Debt Advisory

A credit rating is a system used to assist lenders and providers of credit in making decisions.

It essentially measures the potential ability to repay financial obligations by using various current and historical information. This work is done by a few different credit rating agencies, and the rating they provide is typically expressed as a grade, with A being the highest and G being the lowest, or as a mark out of 100.

If you own your own company you can be sure that someone has checked your credit score — it could be a possible customer looking to learn more about you as a company or a potential supplier checking to see whether you are a good credit risk. A bank will also perform a credit rating check when renewing borrowing facilities, such as an overdraft or loan, or when looking to provide new facilities.

Over time, your credit rating fluctuates.

What affects your rating?

Your rating may be impacted by a variety of factors. A County Court Judgment (CCJ) filing is arguably the most harmful. This is when a debt hasn’t been repaid in line with the agreed timeframe and the individual/company owed the money formally moves the process into the courts to aid with collection.

A CCJ is filed as a permanent record in that business's credit history. Even if you satisfy the judgement, it will still be recorded on your record, making it possible for a lender/supplier or other third party to see that you have defaulted on a payment.

You may be surprised to learn that many High Street Banks will not open a bank account for a company with a CCJ.

Other factors that could cause your rating to reduce:

late filing of statutory accounts
trend towards paying creditors later than the industry norm
numerous credit searches, which perhaps indicate difficulty in the raising of finance
poor set of statutory accounts filed at Companies House.
a change of Director(s) can sometimes have a negative impact.

Steps you can take to monitor your credit rating

At Crowe we advise clients to actively monitor their own credit rating. A simple change could have an impact on a company's ability to obtain credit. Imagine if your key supplier's terms were changed from 90 days to 30 days and you were suddenly required to pay for two months’ worth of purchases from that supplier overnight. Cashflow would be significantly impacted.

To aid in the management of this possible risk, we work with Capitalise for Business - a service to track your credit score.

This is possible due to its unique partnership with Experian, one of the major credit agencies.

If you choose to subscribe, one of the services includes the chance to improve your credit rating. The success rate is over 90%. This is probably one of the least expensive methods of enhancing your cashflow because:

If your rating is high then suppliers are more likely to agree favourable terms of trade.
If new debt is required, the higher the rating, the lower the risk to the lender and so more debt at cheaper rates could be a possibility.
New clients will regard you more favourably and more commercial work might be secured for your business.

Other benefits and advantages

You may also keep tabs on the credit standing of 100 enterprises of your choosing with Capitalise for Business.

Concerned about their very overdue invoice? Maybe you wouldn't have given Joe Bloggs those favourable terms of trade if you had known that their credit rating had fallen significantly. You could have requested an upfront or partial payment.

How we can help

To benefit from the Credit Review Service you will first need to subscribe to Capitalise for Business. This service allows you to track your own credit rating as well as 100 businesses of your choice for an annual cost of just £495. An additional fee is payable if you would like us to try and improve your credit rating.

Find out more about how we might be able to raise your credit score on Capitalise for Business.

Understand your business credit score and access funding.