As it reveals that two thirds of SMEs don’t think it is important to check their own business credit scores
Nottingham, 11 June 2010 – Experian today advised UK small and medium sized enterprises (SME) about the importance of actively monitoring and managing their own business credit scores to put them in the best possible position to secure credit, business loans, tenders or business services.
Using commercial credit scores enables businesses to manage the risks of not getting paid, losing a vital supplier or becoming a victim of fraud.
Experian’s research shows that many SMEs are not aware of what picture their own company’s credit health paints about them and how they can positively influence it. The independent survey of over 500 UK SMEs reveals that over half of SMEs recognise the importance of checking a customer or supplier’s commercial credit score, but only 28 per cent think it is important to check their own commercial credit score.
In a climate in where a healthy credit score is more critical than ever before, Experian is recommending that it is essential for all businesses to understand their credit status and the steps they can take to positively influence it.
Experian’s figures show that although the financial stability of UK businesses has improved in the last 12 months and the rate of insolvencies has become stable, they have yet to return to the levels they were at before the recession. Therefore, it continues to be vital for businesses to understand the circumstances in which they are operating.
Simon Streat, Experian’s Head of SME for UK and Ireland, said: “Our analysis has found that 56 per cent of SMEs know it is important to use credit scoring to help them manage some of the financial risks associated with extending credit or a business loan to new customers. However, most do not appreciate the importance of knowing their own commercial credit score or the value they will gain by actively monitoring and managing it.
“These are tough times for SMEs and the message is very clear. They need to check their credit reports regularly, especially before making an application for credit or a business loan, to ensure that their reports accurately reflect their circumstances.
“The steps towards a healthy commercial credit score are simple and those that are taking them are seeing the benefits.”
Experian today published key advice for SMEs on how to build a healthy commercial credit score: