What is a business credit score and how to improve yours

Published Monday 15 June 2026

Table of contents

• What is a business credit score?
• How are business credit scores calculated?
• What is a good business credit score?
• Business credit score vs personal credit score
• How to check your business credit score
• How to improve your business credit score
• Can you get finance with a low business credit score?
• Protect your business credit score with better cash flow management
• FAQs on business credit scores

Key takeaways

• A business credit score is a number between 0 and 100 that measures how likely your company is to pay its debts on time. Lenders, suppliers and potential partners use it to decide whether to offer you credit, favourable terms or business opportunities.
• UK business credit scores are rated on a 0 to 100 scale, with scores above 80 generally considered low risk. You can check your score through credit reference agencies such as Experian, Equifax and Creditsafe without affecting it.
• Paying bills on time is the single biggest factor in building a strong score. Data from 440,000 UK small businesses shows the average late payment stood at 8.2 days past due in the March quarter of 2026.
• You can improve your score by reviewing it regularly, keeping credit utilisation below 30%, limiting credit applications and filing your accounts with Companies House on time.

What is a business credit score?

A business credit score is a number between 0 and 100 that shows how reliably your company pays its bills and manages its debts. Credit reference agencies (CRAs) such as Experian and Equifax calculate it using your company's financial history.

Lenders, suppliers and potential business partners use your score to decide whether to extend credit to your company. A strong score can help you access loans at lower interest rates, negotiate better payment terms with suppliers and win contracts with larger organisations.

Your business credit score is typically public, which means other companies can check it before deciding to work with you. You can also check another company's score to assess whether they're likely to pay you on time.

How are business credit scores calculated?

Each credit reference agency uses its own method to calculate your business credit score, so you'll have multiple scores that may differ slightly. However, all agencies weigh similar factors when assessing your creditworthiness.

Key factors that affect your score include:

• Payment history: your track record of paying bills, invoices and debts on time
• Credit utilisation: how much of your available credit you're using, with 30% or lower considered healthy
• Public records: information filed at Companies House, county court judgments (CCJs) and any insolvency proceedings
• Number of credit applications: how many times you've applied for credit in a recent period
• Company accounts: whether your annual accounts are filed on time with Companies House
• Length of credit history: how long your company has been operating and using credit
• Industry risk: some sectors are considered higher risk than others based on historical data

Payment history typically carries the most weight. Even a single missed payment can lower your score, while a consistent record of on-time payments builds it steadily over time.

What is a good business credit score?

In the UK, business credit scores are measured on a 0 to 100 scale. The most widely used is Experian's Commercial Delphi Score, which groups businesses into risk bands based on their likelihood of paying on time.

The risk bands are:

• 91 to 100: very low risk
• 81 to 90: low risk
• 51 to 80: below average risk
• 26 to 50: above average risk
• 16 to 25: high risk
• 2 to 15: maximum risk

A score above 80 is generally considered strong. Most lenders look for a score of at least 45 to 50 before approving finance, though requirements vary by lender and the type of credit you're applying for.

If your score falls below 50, you may face higher interest rates, lower credit limits or requests for personal guarantees. Checking your score regularly helps you understand where you stand and what steps to take to improve it.

Business credit score vs personal credit score

Your business credit score and personal credit score are separate. Your business score is based on your company's financial history, including how you pay suppliers and manage company credit. It's often publicly available through credit reference agencies.

Your personal score is based on your own finances, such as your mortgage, credit cards and personal loans. It's private and only visible to you and lenders you apply to.

If you're a sole trader or director of a small limited company, lenders may check both scores when assessing a credit application. Keeping both scores healthy gives you the best chance of securing finance for your business.

How to check your business credit score

You can check your business credit score through the main UK credit reference agencies. Each agency may give you a slightly different score, so it's worth checking more than one.

The main options are:

• Experian: offers free basic business credit reports and paid monitoring services with alerts
• Equifax: provides business credit reports through its commercial services
• Creditsafe: offers free basic reports and detailed paid reports with financial analysis

Checking your own business credit score is a soft check, which means it won't affect your score. You should review it at least 3 to 4 times a year to spot errors, outdated information or unexpected changes. If you find a mistake, contact the credit reference agency directly to request a correction.

How to improve your business credit score

Building a strong business credit score takes consistent effort, but the steps are straightforward. Here are 7 practical ways to improve your score and demonstrate reliability to lenders and suppliers.

1. Review your business credit score regularly

Check your score at least 3 to 4 times a year so you can spot problems early. You can get free reports from Experian, Equifax and Creditsafe, or use paid monitoring services for more detailed alerts.

If your score drops unexpectedly, contact the credit reference agency to find out why. Look for reporting errors, disputed payments or outdated information and request corrections where needed.

2. Pay bills on time

On-time payment is the single biggest factor in your business credit score. Data from 440,000 UK small businesses shows the average late payment stood at 8.2 days past due in the March quarter of 2026, according to Xero Small Business Insights.

To stay on top of payments:

• Set up a reliable accounts payable system so you always know when bills are due
• Use accounting software to automate payment reminders and schedule payments in advance
• Monitor your cash flow so you can see potential shortfalls before they lead to late payments
• Larger companies and utilities are more likely to report late payments to credit agencies

3. Keep credit utilisation low

Credit utilisation measures how much of your available credit you're currently using. Aim to keep it at or below 30% of your total credit limit.

For example, if your business has a credit limit of £10,000, try to keep your outstanding balance below £3,000. High utilisation signals to lenders that your business may be overly reliant on borrowed funds.

4. Limit credit applications

Each formal credit application triggers a hard search on your file, which can temporarily lower your score. Multiple applications in a short period can make your business appear financially stretched.

Before applying for credit, check whether the lender offers a soft eligibility check that won't affect your score. Space out applications where possible and only apply for credit you're confident you'll be approved for.

5. File your accounts on time

Companies House records whether your annual accounts and confirmation statements are filed on time. Late filings are visible on your public record and can lower your credit score.

Set calendar reminders well ahead of your filing deadlines. If you use accounting software, you can generate the reports you need quickly, so there's less reason to file late.

6. Communicate with suppliers about cash flow

If you're struggling to pay a supplier on time, let them know as early as possible. Suppliers are more likely to offer flexible terms if you communicate before a payment is overdue, rather than after.

Across 440,000 UK small businesses tracked by Xero Small Business Insights, the average time to be paid was 29.0 days in the March quarter of 2026. Knowing your own average payment cycle helps you reduce payment delays and plan conversations with suppliers before cash gets tight.

7. Use accounting software to stay on top of payments

Accounting software gives you a real-time view of what you owe, what you're owed and when payments are due. Automating invoices and payment reminders helps you avoid the kind of missed deadlines that damage your credit score.

You can also set up cash flow forecasts to spot potential shortfalls weeks in advance. That gives you time to chase overdue invoices, adjust spending or arrange short-term funding before you miss a payment.

Can you get finance with a low business credit score?

A low business credit score doesn't mean you can't access finance, but your options may be more limited. Some lenders specialise in working with businesses that have lower scores, though they typically charge higher interest rates.

Options to explore include:

• Specialist or alternative lenders that focus on businesses with imperfect credit histories
• Community development finance institutions (CDFIs) that support small businesses in underserved areas
• The government-backed Start Up Loans scheme, which considers your business plan alongside your credit history
• Secured lending, where you offer assets such as property or equipment as collateral

Improving your score should still be a priority, as it opens up better rates and terms over time. Even small, consistent steps, such as paying bills on time and keeping credit utilisation low, can make a noticeable difference within a few months.

Protect your business credit score with better cash flow management

Your business credit score reflects your ability to pay on time, and that starts with managing your cash flow. When you know exactly what's coming in and going out, you're less likely to miss payments or run into credit control issues that damage your score.

Xero's accounting software helps you track invoices, automate payment reminders and forecast your cash flow so you can stay ahead of your commitments. Get one month free.

FAQs on business credit scores

Here are answers to some frequently asked questions about business credit scores.

How long does it take to improve a business credit score?

There's no fixed timeline, but you may see improvements within a few months if you consistently pay bills on time and manage your credit carefully. Building a strong history takes time, so maintain good financial habits over the long term.

Does checking my business credit score affect it?

No, checking your own business credit score is a soft check and won't affect it. You should review it regularly to spot errors or areas for improvement.

What if my business is new and has no credit history?

New businesses start with a neutral or empty credit file. Register with credit reference agencies, pay your bills on time and file your accounts with Companies House promptly to start building your score.

Can I check another company's business credit score?

Yes, business credit scores are generally public information. You can check another company's score through credit reference agencies such as Experian, Equifax or Creditsafe, which is useful for assessing whether a potential customer or partner is likely to pay on time.

What is the difference between a business credit score and a credit report?

A business credit score is a single number that summarises your company's creditworthiness. A credit report is a detailed document that includes the data behind that score, such as payment history, CCJs and company filings.

Does my personal credit score affect my business credit score?

Your personal and business credit scores are calculated separately. However, if you're a sole trader or a director applying for business finance, lenders may review both scores as part of their assessment.