Managing your commercial credit score will help you secure investment

From the Funding for Lending scheme to crowdfunding and mezzanine, there have never been so many sources of funding open to small firms. But SMEs are missing a trick, which is possibly why many have been unable to gain bank loans instead.

Of course, were you to ask most businesses for a list of priorities, managing their commercial credit score would probably not feature very high. However, a healthy credit score is one of the essential foundations of a successful business, and is key to successfully applying for bank loans and tenders, among other things.

Yet only two in five UK SMEs have ever checked their commercial credit score, reveals Experian. This is worrisome given the fact that it remains essential for SMEs to appear as an attractive proposition as possible to potential creditors when seeking investment to grow.

Furthermore, many are not aware of what picture their own company’s credit health paints about them and how they can positively influence it.

“A good credit score can make a big difference in a small business owner’s life,” said Liz Weston, author of ‘Your Credit Score, Your Money & What’s at Stake‘.

“There’s only one way to improve your score quickly, and that’s if there’s untrue negative information,” she explained. “If you have somebody else’s account showing up on your credit report and you get that taken off, for instance, you’re likely to see a quick improvement in your scores. Other than that, it’s really a game of small improvements over time.

“The most powerful thing you can do to improve your credit score is to reduce your credit utilisation,” Weston says. The less you use of your credit limit, the better your score.”

Taking control of a company’s credit position is one of the most effective ways to maximise a business’ chances of securing investment as it has the possibility to increase the funding options available to a business.

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