How Credit Scoring Can Affect Your Contract
When we do a price comparison on electricity and gas prices, we advise our customers that they will have to go through credit check with a credit agency. Most of the energy suppliers will want a credit rating before they will sign a contract. It has been calculated that one in three companies are denied the cheapest rates as their credit score falls below the minimum that is required.
Businesses that do not have a favourable credit score, usually have to take uncompetitive contracts. Some of these out of contract rates are as much as 300% higher than the cheapest energy rates.
This scenario not only hurts new businesses who may not have a credit rating, it also impacts on long standing businesses whose contracts are up for renewal.
We have experienced companies who have appealed to us because their existing supplier refuses to renew their contract as they have cited poor credit rating even though the company has made regular payment on their utility bills.
We don't believe that this practice is fair and there should be other options available. Through lengthy negotiations we now have agreements in place with some leading suppliers who have agreed to take on customers who have low or no credit scores, whilst still providing excellent prices.
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We offer some tips on keeping and increasing your business credit profile
Direct Debit Payments are an excellent way to keep your credit ratings in good health.
Know your score it's always a good idea to do a regular check on your credit score; you should make this an annual check. There are times that agencies can get it wrong. If you are able to prove that they are in error, they will be obliged to correct the report.
Be on time when submitting your accounts always make sure that your accounts are up to date and that you have submitted them timeously so that they can reflect as up-to-date.
Your personal finance can affect the credit rating it is not just your business that needs to have a good, clean rating, partnerships and sole traders will be accepted or refused on their personal rating and not just the businesses.
Ask for regular feedback ask suppliers who have established a credit for your business to report positive information. This lack of information can be harmful to your business profile.
Payment history is important, suppliers, credit agencies and lenders base their assessment of your business on your payment history as well as the amount of debt outstanding. If you have small loans, pay them back on time, these loans can establish a good credit score and will be a good point in your favour.
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