Credit ratings that convey credibility

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If you’re seeking business borrowing, the first thing any lender will do is to check your credit rating on one of the major reference agencies such as CreditSafe, MINT, Experian, etc.

Here’s a few tips for presenting your proposition in the most positive light:

Ensure your balance sheet is well structured – in other words, making sure assets and liabilities are classed correctly. As an example, reclassifying Directors loans to the company as long term liabilities rather than short term liabilities improves net current assets

Collect the cash – towards the end of financial year end, try to collect as much cash as possible so that the balance sheet is strong. You may wish to temporarily offer discounted payment terms to get invoices (although not too much discount as that impacts profitability)

File your accounts on time – late filing at Companies House well get you a black mark

Pay your suppliers on time – take advantage of the terms they offer, but not a day more

Check for errors – even a simple mistake such as an incorrect address can affect your credit history. If you believe that there are errors in your report, you can dispute these with the credit agency but will probably need to provide documentary evidence of your claim.

Show you can pay your debts as they fall due – positive net current assets e.g. having more trade creditors than trade debtors, will demonstrate this

Check your fellow Directors ratings – if any Director has a CCJ or IVA, then that will seriously affect the rating; likewise of course if the company itself has any CCJs (unless you paid the amount in full within 28 days of the claim being made, then the judgment will have been cancelled and this shouldn’t appear on your record)

Have your accounts to hand – if your company is not incorporated, then the lender will mostly likely ask you directly for the last 2 -3 years sets of accounts. Having these to hand will avoid delays in your application.

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