Top tips to improve your credit rating
Whether you’re looking at funding, or loans, a poor credit rating can have a significant impact on which funders may lend to you, therefore the price you pay. In the article below, we offer some advice on how to quickly improve your credit rating.
- Make sure you file your company accounts on time and in full. Whilst filing them early won’t help too much (besides making you appear well organised) but filing them late can have a negative impact. It also makes your business look unreliable to potential funders if you can’t meet filing deadlines.
- Have your accounts ready and be transparent with lenders – they want to know you aren’t hiding anything, so ensure that your records are easy to understand and any discrepancies can be explained.
- Use a reputable accountant. If your business uses a Chartered Accountant, who is well respected, and has a membership with the trade organisation (ACCA/ ICAEW) helps to provide funders with reassurance.
- If you’ve got a complicated corporate structure (say for tax efficiencies) be prepared to explain why and the reasons for doing so. As above, potential funders like transparency, and lots of subsidiaries could raise a red flag to funders.
- Similarly, if you’ve directors entering and leaving the business frequently, it might lead the funder to believe that there’s something happening within the business that they need to be made aware of. A well-established leadership team will instil confidence that your business is a safer bet.
In our experience, when it comes to poor credit ratings, many of the businesses we speak with simply didn’t understand the implications of what they were doing on their credit rating. If you are concerned that your credit rating may impact your funding application we’re more than happy to complete a credit check on your business and discuss ways to improve your rating.
This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.
The information was correct at time of publishing but may now be out of date.