What is a Business Credit Score and How Does it Impact Energy Deals?

Are you a business owner who would like to know more about credit scores? Look no further. Our expert team at Valda Energy has compiled the top questions business owners might have about business credit scores.

What is a business credit score?

A business credit score is a numerical measure that assesses how financially reliable a company is. This is used by banks, lenders, suppliers and customers to decide if they will trade with you and see how you will manage repayments.

Your business score will sit in a range from 0 to 100, with 100 representing a low risk. If your business has a low credit score, it will cost you more to secure finance and push up your overall costs. That’s why maintaining a healthy credit score is important for every business.

What factors influence a business credit score?

There are several factors are considered when calculating a business’ credit score. These generally include:

• Company size/employee count.
• If your bills are paid on time.
• Successful/unsuccessful finance applications.
• Credit history of company directors.
• Level of debt.
• Length of time trading.

Will my business’ credit score impact my energy deal?

Just like with a domestic energy deal, your energy supplier will run a credit check on your business before entering a contract with you. If your business has a low credit score, you will still be able to secure an energy deal, you may just find that your options are slightly more limited.

Will switching energy suppliers affect my business’ credit score?

Switching energy supplier itself won’t directly impact your credit score, but depending on the type of search, having a credit check run against your business can slightly affect the score. This slight decrease is normal in any situation where credit is requested.

If you are looking to switch but not sure where to start, check out our blog on switching energy supplier.

Whether you’re looking to switch energy supplier or not, it is important to maintain a good business credit score to get access to better deals. If you are looking to improve your business credit score, visit the Small Business Federations blog for 8 ways to help it.