Credit Report tablet, credit report score, business reportHow an Accountant Can Help Maintain Your Business Credit Score? 5 Credit Score Tips for Growing your Business Credit Rating


Let start from the beginning… If you are Self Employed or run a Limited Company, and you are looking to improve your business credit score, you must be aware that, in addition to the day to day running activities of your business, there are other obligations that you will need to fulfil at the end of each year. 


As a Self Employed Individual, you will need to submit a Self Assessment Tax Return. It’s slightly different if you run a Limited Company, in addition to submitting your Personal Tax Return (in other words a Self Assessment Tax Return), you will also need to submit for the business, the Year End Accounts, Corporation Tax Return and a Confirmation Statement.


The Year end accounts and Confirmation statement must be submitted to Companies House and the Self Assessment/Personal Tax Return and the Corporation Tax Return will need to be submitted to HMRC

So, How can an Accountant help you maintain or better your score?


In addition to the usual ways of improving your business credit score as outlined below, here are ways an Accountant can help you improve your business credit score.


It’s important to understand that the lenders will require to see your Full accounts rather than Micro entity accounts, so having an Accountant who understands the difference between Micro entity and Full accounts, will make the difference for your business when applying for finance.


Filing your accounts on time and in line with HMRC guidelines can lead to a better business credit rating in the long run. A proactive Accountant will ensure all the necessary information is received in good time for the preparation and submission of the accounts. It is always advisable to file the accounts on time and avoid late filing penalties. This will not only save you money but will also improve your business credit score.


Essentially, having an Accountant that will help you understand the key numbers in your business is vital. A relevant detailed report prepared and produced by a Competent Accountant will enable you to take the necessary action if things are going in the wrong direction or if changes need to be made.


Ultimately, you will be able to make decisions based on Facts and this will improve your business credit score.

So How do you Build an Excellent Business Credit Score? 


An excellent business credit score can accelerate the growth of your small business by making it easier to secure credit and attract investors. Furthermore, a great credit score reduces the cost of borrowing and can help you to secure more flexible terms from credit providers, thus protecting the financial health of your business and creating greater scope for investment. 


There are 5 steps you can take to put your business in the best possible position for borrowing in the future. Let’s dive in. 


1. Register with Credit Bureaus 

Credit bureaus collect and organise credit information to create a report to help lenders come to a decision. You should register with the major credit bureaus as soon as possible to understand your credit score and discover which lending options may be available to you. The major credit bureaus are:


  • Experian 
  • Dun&Bradstreet
  • Equifax 
  • TransUnion

2. Check Your Score Regularly 

It pays to keep a close eye on your business credit score. Checking your score regularly will allow you to quickly spot any problems and rectify them before they do real damage to the financial health of your business. It’s a good idea to sign up for alerts to notify you of any changes to your credit score so that you’re always one step ahead. 

3. Separate Your Business and Personal Finances 

It’s a huge mistake to mix your business and personal accounts, for a number of reasons. First of all, it makes it incredibly difficult and time-consuming to file a tax return and leaves you liable to costly mistakes. Furthermore, any dips in your credit score will then prove doubly damaging. Maintaining separate business and personal accounts makes it far easier to manage your finances and helps you to present a stronger case to potential investors or creditors.  


In order to keep your business and personal finances separate, set up a business bank account and apply for a business credit card as soon as possible. This will allow you to maintain clear and accurate records from the start, thus demonstrating financial responsibility and professionalism. 


4. Maintain Good Personal Credit 

Credit providers often take a business owner’s personal credit score into consideration when deciding whether to lend or not. Messy personal finances are a huge red flag to potential lenders. If you can’t handle your personal finances well it’s unlikely that you’ll fare much better in business. Here are a few simple ways to build an excellent personal credit score:


  • Pay your bills on time 
  • Keep a close eye on direct debits
  • Ensure you always have a cash reserve for unforeseen costs 
  • Use your credit card like a debit card and pay off the balance immediately after making a purchase. This helps to build an excellent credit score without running the risk of accumulating debt.

5. Talk to Your Vendors 

It’s worth asking your vendors whether or not they report payment performance to the major credit bureaus. If they do, you can use this to your advantage to build a stellar credit score. Paying these vendors on time, or ideally early, is a fantastic way to boost those numbers. This signals to credit providers that you’re financially responsible and can be relied upon to make timely repayments. 


From My Business to Your Business: Hard Work Pays Off!

Building an excellent credit score takes time and hard work, which is why you should start to implement the above steps right now. A stellar credit score will help to rapidly accelerate the growth of your business in the future, but you have to put in the groundwork today. 


They say it takes years to build a reputation and just minutes to destroy it. The same is true for your credit score. Once you build a great score, don’t rest on your laurels and assume that all the hard work is done. You must make a concentrated effort to maintain this credit store and continue to be financially responsible because the rewards are definitely worth it. 


You're very welcome to get in touch with Grace Certified Accountants if you have any questions.  Book a Free Call directly into my diary HERE.


Speak Soon!


Dora Ngoma


Director & Managing Partner

Grace Certified Accountants


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