Your business credit report is one of the most important tools when it comes to accessing and securing finance. It can be useful when it comes to negotiating payment terms with suppliers too. What can you do if your credit report is not as good as you would like it to be?
Check your report
There are many services that you can use to check your business credit report, but they usually come with a fee so make sure that you check the charges before you sign up. Credit agencies compile your report based on information that is available publicly, you should regularly review your report to make sure the information is correct and monitor any changes that may appear.
Correct any mistakes
Mistakes on your report can cost you. They can impact on your credit history and even your credit score. If you discover an inaccuracy, then dispute it with the agency that compiled the report. You may need to supply documentation to correct the mistake, once cleared the mistake should be removed from your file.
Look out for CCJ’s
County Court Judgements (CCJ’s) are issued against you if you have an outstanding payment with someone. If you pay the full amount within 28 days of the claim being made, the judgement will be cancelled and shouldn’t appear on your credit report.
If you pay in full later, you can request a letter of confirmation from whomever filed the claim and deliver it to County Court. The court can then issue you with a certificate of satisfaction or cancellation. The CCJ will appear on your report but will be marked as “satisfied”.
If an amount remains unpaid then the CCJ will appear on your report for six years. CCJ’s heavily impact your credit rating as it makes you seem as though you are unable to pay back debts.
Keep filing up to date
If you are a limited company, the credit reference agency will mainly use documents that you file with companies’ house to compile your business credit report. This means, to maintain a healthy credit report, you should make sure you file documents regularly and before deadline and update any changes to the business.
If you are a firm or partnership and not a limited company, you are not legally required to file information with companies’ house. Suppliers may ask for your financial information directly. If you have information about your business that can improve your credit rating, then you can contact the credit agency.
If you are a new business or are yet to file business accounts, a lender may consider your personal finances. You should treat this with as much care as you do your business finances. If it looks like you will use business money to clear your personal finances, then a lender will not lend to you.
Don’t rely on credit
Any application for credit that you make is noted on your report. If you apply and get rejected regularly then this can impact your credit history. Constant applications for credit make it appear that your business is struggling and that you are wildly seeking help. Follow good credit control practices to ensure that you don’t need to rely on credit.
Know your customers
Don’t let customers ruin your credit rating by not paying. You can carry out credit reports on your customers to get a good idea of their payment history. You can monitor their accounts and check their history with suppliers. If they move from suppliers very regularly then it may be a sign of a bad relationship/
Don’t be afraid to chase late payers
You should have a routine credit control system in place. Contact your client via letter, email and phone. Be prepared to act quickly on invoices of a large amount or if you are working with a new client, especially if you have concerns about their payment history. Commercial Domestic Investigations understands that credit control can be difficult and time consuming, we have a highly-trained team that use best practice to recover your debt.
Pay on time
Not only is it good business practice and maintains good relationships with suppliers but making payments on time helps to build a good business credit rating. Set up direct debits for bills and regular payments so that you will never miss a payment.
Commercial Domestic Investigations offer a wide range of services, from invoice collection to credit reporting. All of which can boost your cashflow and keep your credit report healthy. If you want to discuss your options then contact us on 08444 159200 or email firstname.lastname@example.org.