Business Credit Reports, what do they contain?

  • UK business credit report what does it contain?

A business credit report is similar to a person’ credit score in that it is a score given to a company (in this case, rather than an individual) which determines how creditworthy the company is to potential partners, investors, suppliers and customers.

The credit report can be a strong indication of how well the company is doing, financially, because it is compiled from elements of the accounts of the business, such as:

  • Cash flow
  • Balance sheets

There are other elements too, but these are the main two factors taken into consideration. As with personal credit scores, there is a range of different elements that are looked at and taken into consideration.

Business credit reports are compiled on a prediction basis, using different algorithms from reference agency to reference agency – this is why the reports can sometimes differ depending on the credit reference agencies used.

A business’ credit score shows the likelihood of a business becoming bankrupt within the next 12 months. For instance a score of 0 means this eventuality is highly probable, while a score of 100 means it is very unlikely. In short, the higher the score the more stable the company is deemed to be.

  • What is shown on a business credit report?

Reports of this type contain detailed information regarding a particular business, whether it is your own or that of a company you are considering doing business with. These reports can give useful insight into what the financial situation is of the given company such as:

  • Details on who the director is
  • How the company pays its bills

Every business credit report will give the person requesting the information the name of the business, its registered address, company number, the date it was incorporated and a SIC description. The SIC description, essentially, states what sector the business is in – which is based on information held by Companies House.

If the business has a listed telephone number and/or a website then the business credit report will state this information too.

  • Key financial information

The important financial information of a business will also be shown on the credit report when the accounts are filed. ‘key financials’ include profit and loss, the balance sheet, business capital and reserves, cash-flow and other pertinent details.

As well as the above, there will also be rations stated like debtor and creditor days, profits before tax etc. All of this is taken into account when the score is being determined. That being said, all detail is there for the business or person that requested the report to dive deeper into, if they have an eye for numbers.

  • Negative financial detail

A business credit report in the UK is also going to show negative financial details, such as county court judgements (CCJs). If you are not sure, a CCJ happens when a company fails to pay an invoice and has been taken to court for the other company to have their debt paid.

How long a CCJ remains on a credit report is going to depend on how quickly the company that received it takes action. For instance, if a county court judgement is settled (either paid or disputed successfully) within 30 days, then it is removed from the credit report completely. Otherwise, it will remain on the report for 6 years.

  • Director information

A company credit report also details Director and Shareholder information. This information will include names, date of birth and address of every director and shareholder within the business. Also detailed will be their nationality and any links they may have with other businesses past and present – including directorship positions with failed companies.

Credit reports for business’ are, as you can see, highly detailed – and necessarily so – and they can help any business make the right decision when it comes to teaming up with customers, partners etc.

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