Credit scores, both for individuals and businesses, are incredibly valuable. They provide easy-to-understand overviews of a person’s or organisation’s financial health and are an excellent shorthand metric for businesses to use during their due diligence and qualification processes.
Yes, companies have credit scores.
You’re probably aware that, as an individual, you have a credit score, but the same applies to businesses too. Just as with personal credit scores, company credit scores are numerical values assigned to businesses by credit reference agencies such as Creditsafe that summarise a business’ creditworthiness.
This score can help lenders, brokers, suppliers and other stakeholders assess a company’s financial health and reliability before engaging with or offering financial services to them.
Depending on the credit reference agency, the specifics of what is assessed in a business credit score vary. Generally speaking, however, they almost always include the following factors:
Payment history
This highlights the company’s track record of paying bills, loans and other financial obligations on time. Late or defaulted payments will have a negative impact on the company’s score.
Credit utilisation
This measures how much of a company’s available credit is being used. High utilisation of available credit can be an indication of financial strain, and can therefore lower the score.
Company size and structure
Some credit reference agencies will take into account a company’s age, size, industry and legal structure when assigning company credit scores. In this case, larger, more established organisations will be perceived as being less risky, and therefore be likely to have a higher score.
Public records
Bankruptcies, county court judgements (CCJs) and legal action taken against a company are taken into account and will often drastically lower a company’s credit score.
Financial performance
Revenue, profitability and cash flow will be assessed and are often highly valuable indicators of a company’s creditworthiness, altering their credit score significantly.
If you offer financial services to businesses or operate within the brokerage and lending industries, having access to company credit scores is invaluable. They can help you to make financial assessments quickly and easily, making your qualification, due diligence and overall onboarding process far more efficient.
However, manually accessing different credit agencies’ reports and trawling through financial data can be very time consuming, negating much of the value that accessing business credit scores bring. Especially when combining the data with your own assessments or information from the likes of Companies House.
SalesTech is our decision engine software that automates the lookup, due diligence and onboarding process for B2B financial institutions. Our software imports, reads, scores and qualifies Creditsafe business credit reports based on custom criteria set by the user. This includes assessing company credit scores almost instantly. Once scored, the information is fed into our decision engine, allowing you to approve or deny applicants in seconds.
When you use SalesTech, you establish the criteria necessary to work with a company and we do the rest. Each applicant will be scored against your bespoke requirements and can be automatically approved or denied so you can allocate your time to more efficiently growing your business.
Knowing if a company has previously filed for bankruptcy is essential to assessing its financial stability. With Companies House, you can view detailed records of the insolvency history of limited companies which…
Knowing if a company has previously filed for bankruptcy is essential to assessing its financial stability. With Companies House, you can view detailed records of the insolvency history of limited companies which…
Knowing if a company has previously filed for bankruptcy is essential to assessing its financial stability. With Companies House, you can view detailed records of the insolvency history of limited companies which…
Knowing if a company has previously filed for bankruptcy is essential to assessing its financial stability. With Companies House, you can view detailed records of the insolvency history of limited companies which…
Knowing if a company has previously filed for bankruptcy is essential to assessing its financial stability. With Companies House, you can view detailed records of the insolvency history of limited companies which…
Knowing if a company has previously filed for bankruptcy is essential to assessing its financial stability. With Companies House, you can view detailed records of the insolvency history of limited companies which…
