While business confidence levels in the UK have remained relatively high in recent times, it appears as though the looming spectre of Brexit is finally beginning to take its toll. Most tellingly, the ICAEW Business Confidence Monitor showed that sentiment declined sharply at the beginning of the fourth quarter, falling to -12.3 in October. To put this into perspective, it’s the lowest level since April 2009, when the country was managing the fall-out from the great recession.
While entrepreneurs may be growing increasingly concerned as Brexit approaches, however, it’s important that they take practical steps to safeguard their ventures. One of the most important measures is to improve (or at least consolidate) your credit score, so following are some simple steps to help you achieve this goal.
1. Check your Report on a Regular Basis
This may sound obvious, but it’s extremely difficult to manage or track your businesses credit score without checking it on a regular basis. This is also relatively easy to do, as you can obtain your firm’s credit report and standing from any of the major service providers including Equifax, Experian and Dun & Bradsheet. While you’ll need to pay a fee to access these reports, this is little more than a nominal charge that offers genuine value as you look to get a hold of your credit standing.
Not only will checking your report help you to clarify your score, but it also enables you to highlight the key factors or debts that are troubling potential creditors. Similarly, you can also identify any errors that may exist on the report, which can quickly be removed and provide an immediate boost to your credit score.
2. Minimise your Credit Utilisation Ratio
Credit utilisation is a deceptively simple term, which refers to the ratio of credit used in relation to the amount available. Make no mistake; firms that have already utilised the vast proportion of their available credit will be treated with caution by lenders, who may question their ability to repay any borrowed funds. As a general rule, you should aim to keep your rate of credit utilisation under 15%, as this will appeal directly lenders and encourage them to see you in a favourable light.
To achieve this, make sure that you pay off your active balances regularly and on-time, while also minimising your spending through open credit accounts. You could also open up a new line of affordable credit, as this creates a positive but manageable transaction on your report. Companies such as Liberis offer viable credit cards, with a fixed cost APR as low as 9%.
3. Open Credit Accounts with Suppliers
On a similar note, you should also consider opening a credit account with trusted suppliers wherever possible. If you work with a number of suppliers regularly and over a sustained period of time, the chances are that you’ll have a good payment relationship and can leverage this with individual credit accounts. This will automatically increase the number of positive payments made on your file, and can play a significant role in boosting your businesses credit score within a relatively short period of time.
Following these tips and being disciplined with your budget will all lead to massive improvements in your business’s credit score in no time. Good luck!