How does credit rating affect your business energy costs?

Why do suppliers check my business credit score?

By performing credit checks, business energy suppliers are able to determine whether you’re likely to be a dependable customer. If suppliers can ensure that you’ll pay your business gas and electricity bills, they are less likely to end up losing out financially.

Recovering money owed by customers can be a very long and difficult process for business energy suppliers so being able to avoid this is massively important to them.

What factors affect your business credit score?

There are a number of factors that can negatively impact your credit score, including:

  • Any outstanding debt your business currently has.
  • The industry your business operates in (some industries are considered to have higher risk than others).
  • How many credit checks your business has had performed in the past.
  • Whether your business has a history of not paying bills on time.
  • How many times your business has applied for finance previously.

Although these are the main areas that credit rating agencies analyse to determine your credit score, there are a number of other factors that will impact your business’s score. If you feel that your credit rating isn’t accurate, it would be massively beneficial to speak to the appropriate credit reference agency about this.

How does a bad credit rating affect my business energy?

Having a poor credit rating can limit your choice of business energy suppliers as many providers are reluctant supply energy to these businesses. Certain business energy suppliers will accept customers with a poor credit rating, so long as one or more of the following actions occur:

  • An additional premium is paid.
  • A security deposit is paid.
  • The payment method chosen is by direct debit.
  • A prepayment meter is installed.

Simply put, if you have a poor credit rating, it is likely that you will pay more for your business energy.

What should I do if I have poor business credit?

Your business’s poor credit score is not permanent and there are various methods for improving your rating and, in turn, possible business energy tariffs and suppliers. These include:

  • Paying off any outstanding debt in the business.
  • Paying all bills on time.
  • Avoiding a heavy reliance on credit.
  • Filling any missing information on your credit report.
  • Keeping your credit report up-to-date.

While you work on improving your credit score, your business will still require energy. Using our simple switching service, one of our energy-switching experts can help you find the best energy quotes no matter your business’s credit score. Click here to receive instant business energy quotes today!

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