Did you know that your financial success in both your business and personal life boils down to three numbers? 
Yes, your credit score – good or bad – has a habit of raising its head when least expected. This can have long-term effect on your credit rating. 
It has been said “Your credit rating is not an indication that you have money. It is an indication that you have debt.” Therefore, it is worth knowing what your credit score is, and how your actions affect it. 
 
 
 
What is a credit score? 
Essentially, your spending habits, debt and cash-flow management are distilled into three numbers. The higher your number, the lower your risk to lenders and vice versa. 
 
How can we help with your Business Credit Rating at Lending Made Simple? 
For each person we speak to, we run a check on Creditsafe https://www.creditsafe.com 
 
This check tells us the following: 
Credit rating of the business 
Net worth of the business 
The Director's current company information 
The Director's historical company information 
History of the events in the company 
How many credit checks the company have had in the last 12 months 
Outstanding charges on the business 
Group structures (if applicable) 
Companies House documentation. 
All this information is relevant when you are looking for funding. We use this information to make an informed decision on which of our funders will have an appetite to lend money to your business. 
 
 
Credit Score
Lending Made Simple receives updates on a daily basis from Creditsafe on changes within our clients companies e.g. should the company get a County Court Judgement, (CCJ) or if the company has lodged their latest accounts. This helps us to monitor the credit rating of our clients and keep them informed should an issue be flagged up.  
 
Personal Credit score? 
With the advances in technology, every financial move you make is monitored. It is equally important to maintain a clean personal credit rating as it is to have a good business credit rating when looking to source funding for your business. 
 
Totally Money tells us, “In the UK, there’s no such thing as a universal credit score. The three credit reference agencies — TransUnion, Experian and Equifax — all use different methods to calculate it, which means it will be different with each one.” 
 
What does a good score look like? 
TransUnion – 781 out of 850 
Equifax – 420 out of 700 
Experian – 880 out of 999 
 
Experian offers the following graph for your information: 
 
 
Experian Credit Score
Why does it matter? 
A good credit score is important for several reasons. 
Imagine you want to open a business or expand your current company and you require a business loan. Your credit score tells lenders if you are a good risk and will determine how much money they are likely to lend you. Your credit score will also impact the interest rates you’re likely to get, as a higher risk equals higher interest rates. 
 
On this topic, Experian says, “Borrowers with strong credit scores will have access to the most loan and credit card products available since lenders will want to lend to them". 
 
A good credit score means that other businesses will want to do business with you. You will attract better rates, discounts and options on several services such as: 
Business Loans 
Insurance 
Rentals 
Credit Cards 
Big-ticket loans such as for a home or car 
Your mobile service providers will check your score before offering you a contract and most landlords will likewise want to know this three-digit number. 
As you can see, maintaining a healthy credit record has far-reaching effects, especially so as the information on these credit files remains for six years. 
 
How to improve your credit score 
We’d like to offer you a few practical ways in which you can improve your credit score if it is not as great as you would like it to be. 
Keep your credit cards and bank overdrafts within 40% of your limits 
Pay your bills on time – set up Direct Debits for at least the minimum amount on all credit cards. 
Check if you are showing any financial links to other people or organisations which may negatively impact your score. 
Pay off outstanding debts before taking out other loans. 
Examine your credit file and request corrections of any erroneous information 
You can download the Experian Credit Score App for free and check your rating every 30 days - https://www.experian.co.uk/ 
 
These suggestions are some of the ways to check your credit score and the accuracy of the details held about you. 
Register on the electoral roll 
If possible, try not to move home too often (Funders like to see continuity. Over 3 years is the optimum) 
Check your profile for CCJs and plan to settle them if they appear 
 
It’s clear that there is no escaping the system when it comes to your credit score. 
We are all best off working hard to keep our finances in check and managing our money wisely. 
 
Do you need Funding in your Business? Have the recent economic episodes left you with some difficult decisions to make? Please feel free to contact our team who can assist you in making the best financial choices right now. 
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