Many business owners regularly monitor their bank balance, sales and cash flow, but overlook another important financial indicator, their credit rating. Whether you are applying for finance, negotiating with suppliers or seeking new business opportunities, your credit score can influence how others view your financial reliability.
In the UK there are three main consumer credit reference agencies, each using its own scoring system. The most widely recognised are:
- Experian: 0 to 999, where 881 to 960 is considered good and 961 to 999 is excellent.
- Equifax: 0 to 1,000, where 671 to 810 is good and 811 to 1,000 is excellent.
- TransUnion: 0 to 710, where 604 to 627 is considered good and 628 to 710 is excellent.
There is no single "perfect" credit score because lenders use their own criteria when assessing applications. However, maintaining a score in the good or excellent range will generally improve your chances of obtaining finance on competitive terms.
Your credit rating can be affected by several factors, including paying bills on time, keeping borrowing within sensible limits, avoiding missed payments and ensuring that your personal details are accurate on the electoral register. Regularly checking your credit file also allows you to identify and correct any errors that could affect your score.
Many people are surprised to discover that they can view their credit report online, often free of charge, through one or more of the credit reference agencies.
If you have not checked your credit rating recently, now could be a good time to do so. A healthy credit record can make it easier to secure finance, negotiate better terms with lenders and suppliers, and provide reassurance that your financial information is accurate before you need to rely on it.