How to build a business credit score in the UK

What a business credit score is

A business credit score is a number a credit reference agency assigns to your company to predict the chance of it failing or paying late. Lenders, suppliers offering trade credit, landlords and sometimes larger customers pull it before they deal with you. Unlike your personal file there is no single regulated score. Experian, Equifax, Creditsafe and Dun & Bradstreet each build their own from overlapping data, so your company can look different at each.

That matters for a card application. Capital on Tap says it checks your personal file with a soft search when you apply and your business file with a hard search when you sign, and that your rate depends on both histories. A stronger business record helps with the rate you are offered and, later, with the size of the limit. It will not get you round the basic eligibility rules on our Capital on Tap eligibility page.

What the agencies look at

Each agency publishes an outline of its inputs. The outlines overlap far more than they differ.

Experian Commercial Delphi

Experian describes its Commercial Delphi score as built from “a unique combination of a number of data assets including; Company accounts, Payment performance, Director information, Consumer scores”, on a scale of 0 to 100. The last two are the ones small-company directors underestimate: the personal records of the people running the company feed the company score.

Creditsafe

Creditsafe says its score is “calculated by credit reference agencies using data such as your balance sheet, cash flow, payment history, and company age”, also on 0 to 100, and its guide lists County Court Judgments, trade payment data and directors alongside those. Company age is worth noticing: a young company scores lower simply for being young, and only time fixes that.

Dun & Bradstreet PAYDEX

D&B’s PAYDEX is narrower. Its page says “The PAYDEX measures a business’s past payment performance” on a scale of 1 to 100, with “scores of 80 and above” considered low risk. It is built almost entirely from how promptly you pay the suppliers who report to D&B, so a company that pays every invoice on the due date rather than early may find its PAYDEX lower than it expected.

Equifax

Equifax also produces business scores in the UK. I have not been able to verify its published factor list from its own site, so I will not summarise one. Assume the same broad inputs: accounts, payment data, public records and directors.

File accounts on time, and think about what you file

Every agency starts with Companies House, and the two things they read first are whether your accounts and confirmation statement were filed on time and what the accounts say. A late filing is a public record of a missed deadline, which is exactly the behaviour the score is trying to predict. Diary the deadline and file early.

What you file is a trade-off. Small companies can file filleted accounts, which leave out the profit and loss account and the directors’ report. That is legal and many accountants recommend it for privacy. But an agency that names “company accounts” and “balance sheet, cash flow” among its inputs can only score what it can see, and a balance sheet alone tells it less. Filing full accounts gives the agencies more to work with; whether that is worth the loss of privacy is a decision to take with your accountant, not one this page can make for you.

Whatever you file, make sure the balance sheet is not obviously weak at the year-end. A company with net liabilities on its last filed balance sheet will score poorly regardless of how well the current year is going, because the agency cannot see the current year.

Pay suppliers on time

Payment performance is a named input at all three agencies with published factor lists, and it is the whole of PAYDEX. The data comes from suppliers and lenders that share ledger information with the agencies, so you will not know which of your suppliers report. Treat all of them as if they do. The habits that help are unglamorous: agree terms in writing, put invoices into your accounting software when they arrive rather than when they are due, and pay on or before the due date rather than in the week after.

If you dispute an invoice, say so in writing quickly. A disputed invoice that sits unpaid looks the same as a late one in a payment data feed.

Keep Companies House details current

The agencies match your company by number and pull officers, registered office, SIC code, charges and filing history from the register. Stale or inconsistent details cause two problems. First, they can trip automated checks: a registered office that does not match the address on an application, or a director who has resigned but still appears, will get flagged. Second, Capital on Tap’s own advice on limit increases includes keeping company filings up to date, on the basis that “accurate public records build trust and confirm your business is active and compliant”.

Check the officers list, the registered office, the people with significant control and the SIC code once a year, and update them the week anything changes rather than at the next confirmation statement.

Director conduct and personal files

For a company under a few years old the directors are the biggest single factor after the filings, because there is not much else to go on. Two things feed through. The first is your personal credit file, which Experian lists as “consumer scores” among its inputs and which lenders such as Capital on Tap check at application. Missed personal payments, defaults and personal CCJs will follow you into the company score. The second is your history as a director: previous companies that failed, were struck off or had late filings are visible on the register and are used.

There is a direct link here to the guarantee most card issuers ask for. Capital on Tap requires a personal guarantee from a director or major shareholder, so the lender is assessing both the company and the person who will stand behind it. What that guarantee means is covered in our guide to the director’s personal guarantee. Keeping company spend off your personal cards also helps keep the two files clean, which is the subject of business vs personal credit card for company spending.

How a business credit card helps

A business credit card is one of the few credit facilities a new company can get without accounts, which makes it one of the earliest ways to put a repayment record on the business file. The mechanism is simple: you spend, you repay on time every month, and the issuer reports that behaviour to the agencies it works with. Over time it becomes evidence that the company services credit properly.

Be precise about what Capital on Tap has said on this. Its FAQ says: “Yes, we run a soft search on your personal credit file when you apply, so applying won't affect your credit score. We only run a hard search on your business's credit file once you sign your credit agreement”. The hard search when you sign is visible to other lenders on the business file. Capital on Tap does not publicly state which credit reference agencies it reports repayment data to, and I have not found a page that says it does. So the card creates a payment record with Capital on Tap and a search footprint on the business file; whether and where the monthly repayments show up at the agencies is not something Capital on Tap has published.

What the card does do, reliably, is give you an internal record with the lender itself. Capital on Tap says it reviews accounts automatically and considers “factors like timely repayments and affordability” when offering a higher limit or a lower rate. That internal record is what our credit-limit page is about.

Utilisation and limits

Personal credit scoring pays a lot of attention to utilisation, the share of your available credit you are using. Business scoring is less transparent about it, but the underlying logic is the same: a company running every facility to its limit looks stretched, and a company using a sensible fraction of its lines looks comfortable. Two practical points follow.

First, pay the card in full each month. That keeps the reported balance low relative to the limit and avoids interest, which is its own subject in how to avoid business credit card interest. If your statement balance regularly runs close to the limit even though you clear it, Capital on Tap’s weekly or daily repayment options through Smart Repay keep the outstanding balance lower at any given moment.

Second, do not confuse a low limit with a bad score. Limits are set by the lender’s own appetite as well as your record. Capital on Tap uses Open Banking data from a linked bank account to assess limit increases, so a company with a good score and an unlinked account may still see a modest limit.

Avoid CCJs, and deal with any you have

A County Court Judgment is the single most damaging public record a small company can have. Creditsafe lists CCJs among its factors, lenders screen for them directly, and Capital on Tap’s eligibility rule is explicit: no unsatisfied CCJs in the last 12 months. Note the wording. It is not “no CCJs ever”; it is no unsatisfied ones in the last twelve months. A judgment you have paid, marked as satisfied, is treated differently from one still outstanding.

CCJs against companies mostly arise from ignored invoices and ignored court letters, not from genuine inability to pay. Open every letter addressed to the registered office. If a supplier threatens court, engage, because a judgment you could have avoided by paying a disputed £900 will cost far more in credit terms over the following six years. If you receive a judgment, paying it in full within a month allows you to apply to have it removed from the register; paying later gets it marked as satisfied, which is the state Capital on Tap’s rule cares about.

Check your own report

You cannot fix what you have not seen. Each of the main agencies sells reports and monitoring on your own company, and it is worth pulling at least one before any significant application. Look for: filings shown as late when they were not, directors who have resigned still listed, a CCJ you did not know about, trade payment data that looks wrong, and any linked companies you do not recognise. Errors can be disputed with the agency, and the Companies House ones can be corrected at source.

Also check the free things. Your Companies House filing history, officers and charges are public, and a lender’s automated check reads them the same way you can.

The credit-limit link

The reason to care about all this with a card in hand is the credit limit. Capital on Tap’s own blog on limit increases lists what it wants to see, and it reads like a business credit score checklist: regular use, on-time repayments, an active Direct Debit, current Companies House filings, an Open Banking connection and a clean record elsewhere. Its FAQ adds that it uses “the information from your linked bank accounts to get a better understanding of your business’s financial health” when assessing increases, and its blog suggests 3 to 6 months of on-time history between requests.

So the sequence is: file on time, keep the register current, connect Open Banking, pay the card in full by Direct Debit every month, and ask for a review after a few months of that. Be aware that a manual review “may result in a higher limit, a lower limit, or a change in your interest rate”, so ask when the picture is good, not after a difficult quarter.

What to expect and when

Business credit builds on the calendar of your filings and the rhythm of your payments, so it cannot be rushed. A realistic timeline for a new limited company looks like this.

• Month 0 to 3. Register accurately, open the business bank account, set up bookkeeping so every supplier invoice has a due date. Apply for a card if you meet the rules. Pay everything on time from the first month.
• Month 3 to 12. Payment data starts to accumulate. Connect Open Banking to the card account. Consider a first limit review once you have several months of full repayments.
• Around month 12 to 21. Your first accounts and confirmation statement are due. File early. This is the first point at which an agency has a balance sheet to score.
• Year 2 onwards. Company age stops counting against you, filed accounts show a trend, and payment history is long enough to mean something. This is when limits and trade credit terms tend to improve.

The broader context for a limited company, including what lenders look for and how director liability works, is in our guide to business credit cards for limited companies. If you are choosing a card partly for its bookkeeping benefits, the accounting feed is described in how the card sync works with Xero, QuickBooks and FreeAgent.