Many factors contribute to a company’s Credit Score, including age of the company, financial performance, director activity and demographics. We’ve put together a list of ways you can use this knowledge to your advantage.
1. Always file. File early.
Filing close to or beyond the due date is the largest cause of a drop in credit score. As accounts age the figures become less relevant when determining the *current* risk of a company. In some cases figures could be up to 24 months old.
Statistical analysis of past insolvencies reveals that companies who file near or beyond the due date are around 3 times more likely to become insolvent within the next 12 month period.
Filing before the due date ensures that there is time for documents to reach credit agencies (it can take up to 10 working days from the point of filing for data to be processed by Companies House, released to agencies, keyed in to the database, analysed and published) and therefore prevent systems triggering late filing.
> It takes 10 working days for data to be analysed and published. To prevent a drop in score, file within 15 days of the due date.
And don’t forget – numbers speak volumes. Financial performance has a large impact on the credit status of a company. A decrease in turnover, profit and / or cash figures will likely result in a decrease in risk score and recommended credit limit.
2. Minimise Bad Debt.
The business activity amongst a company’s directors can impact his or her’s associated companies. If a director is for example, associated with a string of companies that became insolvent or have adverse information this may affect the score. If there are a number of changes within management in a company, this can also have an impact.
If the company is part of a group, those companies within the group will also be analysed to look for adverse information such as insolvency. High numbers of mortgages or charges against associated companies may also affect the score and County Court Judgements are a no, no.
Exact match CCJ’s are kept on record for 6 years, whether they are satisfied or unsatisfied, unless they are settled within one month. To reduce the impact on the score, settle CCJ’s within one month or as soon as possible.
>Settle CCJ’s within one month.
3. Claim Your Company.
Credit reports based on official data are great. They give us an even platform upon which to score companies based on a statistical algorithm applied across all companies. Credit reports (from us or any other provider) share a common flaw, they lack sustenance – the human touch.
We launched Claim Your Company back in 2013 to combat this issue. It gives smaller companies, sole traders (large companies too) a place to provide more information about their business. Contact details, a business description and place to post any comments about the company’s current standing, honestly and openly. Claiming your profile on Company Check gives you, the business owner a voice.
Credit decisions are not always made based on an automated report score. Benefit of doutb and gut instinct can play a large part in credit decisions. By portraying a human side to your credit report, a direct line to you – the business, you give the person carrying out the check something real to go on, outside of the sea of numbers.
> …gut instinct can play a large part in credit decisions.
4. Get Customer and Supplier Reviews.
At Company Check, we aim to provide more than just cold facts. An expansion of the Claim my Company feature is the ability for a business for publish client and supplier reviews on their profile.
Online reviews are becoming an increasingly popular tool for businesses and consumers alike. If you pay your bills on time and have a good credit relationship with your suppliers then showcasing their comments can help boost your credit profile.
Publishing Supplier References and Customer Reviews instill trust and confidence in your business.
> Online reviews are becoming an increasingly popular tool…