Business credit is a lender's or supplier's view of how safe it is to extend credit to your company. For most UK small and medium-sized businesses, that view comes from a commercial credit score compiled by credit reference agencies, not from a formal agency rating. The score is built from public records and payment data, and the inputs you control most directly are filing accounts on time (within nine months of the year end for a private company), paying suppliers to terms and avoiding county court judgments. A CCJ stays on the public register for six years unless it is paid in full within one month.
Business credit scores versus credit ratings
Large borrowers that issue bonds pay agencies such as S&P, Moody's or Fitch for a formal credit rating, which is regulated by the FCA. Our guide to credit ratings explains how that works. Most private companies never have one. Banks, asset finance providers, trade credit insurers and suppliers instead pull a report from a commercial credit reference agency. The report usually combines a score, a recommended credit limit and the underlying data. Each agency uses its own model, so the same company can score differently with different agencies.
What feeds a business credit score
- Filed accounts. Balance sheet strength, net assets, cash and, where filed, turnover and profit. Accounts filed late, or small company accounts filed without a profit and loss account, give agencies less to work with;
- Filing history. Late accounts or confirmation statements, and any strike-off action, are visible on the Companies House register;
- Court judgments. County court and High Court judgments are recorded on the Register of Judgments, Orders and Fines, which banks and lenders use when deciding whether to lend;
- Payment behaviour. Many agencies collect data on how promptly a business pays its suppliers;
- Bank data. Under the Small and Medium Sized Business (Credit Information) Regulations 2015, designated banks must share information about their SME customers with designated credit reference agencies on request, but only where the customer has agreed. The agencies must in turn provide it to other finance providers that request it, again with the business's agreement;
- Company profile. Age of the company, sector, directors' other appointments and history, and the existence of charges over assets.
County court judgments: the one-month window
A county court judgment does the most direct damage, and it is time-sensitive. If you pay the full amount within one month of the judgment, you can apply to have it removed from the register by writing to the court with proof of payment. After one month, paying only gets the entry marked as satisfied. It then stays on the register for six years, although anyone searching can see it has been paid.
Worked example. A supplier obtains a £4,200 judgment against a company over a disputed invoice that the directors never responded to. If the company pays within the month and sends the court proof of payment, the entry can be removed, and a lender searching the register three months later finds nothing. If it pays in week six, the judgment stays visible, marked satisfied, until the six years run out. Every credit check during that period will show it, including the next asset finance application. The difference between the two outcomes is a couple of weeks.
The lesson is to deal with court claims as soon as they arrive. A claim you dispute should be defended, not ignored. One that is owed should be paid or settled before judgment if possible.
How to improve your business credit
- File early, not just on time. A private company must file its accounts within nine months of the end of its accounting reference period. Missing the deadline triggers an automatic civil penalty that increases with the delay, and it is a negative signal on every credit report. Filing well before the deadline gives agencies current figures;
- Consider what your accounts show. A small company can currently file its balance sheet without a profit and loss account. That saves disclosure but can leave a model with little to score, so a profitable company with a strong balance sheet may benefit from showing more. Companies House has announced that from April 2028 small companies will have to file a profit and loss account, with an option to keep it off the public register, and abridged accounts will no longer be allowed;
- Pay suppliers to terms. Late payment shows up in trade payment data and can lead suppliers to cut credit limits. Statutory late payment interest can also be claimed against you;
- Keep the public record accurate. Check that the registered office, directors and persons with significant control are up to date, and that the confirmation statement is filed on time;
- Separate business and personal finances. Use a business bank account and business credit facilities, so that the company builds its own payment history;
- Agree to bank data sharing. Consenting to your bank sharing data with credit reference agencies lets other lenders see your account conduct, which helps a well-run business that has little filed history.
If a bank turns you down
Under the Small and Medium Sized Business (Finance Platforms) Regulations 2015, the Bank Referral Scheme, a designated bank that rejects an SME's finance application must offer to pass the business's details to designated finance platforms. These platforms connect it with alternative lenders. The scheme covers nine of the UK's biggest banks, and the referral happens only if the business agrees. A rejection is also a prompt to obtain your own credit reports and correct any errors before applying elsewhere. Several applications in quick succession, each declined, rarely helps.
Sources: GOV.UK: county court judgments for debt; Companies Act 2006, section 442; Companies Act 2006, section 453; Small and Medium Sized Business (Credit Information) Regulations 2015; Small and Medium Sized Business (Finance Platforms) Regulations 2015; HM Treasury: Bank Referral Scheme statistics; Companies House: changes to accounts filing from April 2028. Related: filing a confirmation statement and liquidity management.
Acumon prepares and files statutory accounts well ahead of the deadline and keeps the Companies House record current through our company secretarial service. Both directly affect how your business scores.