1. Get a copy of your own credit rating reportFind out what your commercial credit score is.
2. Make sure it is an accurate representation of your circumstancesAs the report is based on information from third-party suppliers, it may highlight lingering issues with your business that you were not aware of or thought had been resolved.
3. Make sure invoices are paid on timeA bad payment trend is a key indicator of a deteriorating cash position.
4. File annual returns and financial accounts on timeBusinesses with poor trading results tend to delay submitting their accounts. Late filing of accounts can be a sign of financial distress.
5. Avoid County Court Judgments (CCJ) where possibleIf one does occur, ensure it is settled within the month. In stable economic conditions, the incidence of one CCJ would not necessarily involve the withdrawing of credit lines, but it is more likely to have a greater impact in the current economic climate.
6. Owners: keep an eye on your own personal financesIn cases where the financial data of a business is scarce, consumer data is a valuable indicator of the business’s likely commercial integrity. Subject to consent, lenders are able to consider the personal finances of a business’s directors or proprietors in commercial lending decisions, provided the company is independently owned and has fewer than four directors or proprietors.
7. Put your business on the mapRegister with a credit reference agency or a directory, such as Yell or Thomsons. Make sure there is enough information about your business available – if it falls below the radar then you could struggle to gain access to credit and services.
Simon Streat is Experian’s managing director for SME, UK & Ireland.
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