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Suppliers decide what kind of energy deal to give your business based on many factors, like the size of your business and the number of employees and the type of business you run and where it is. 

Your business credit score is one of the most critical factors in whether or not some energy suppliers will even offer you a deal.

Credit worthiness equates to a company’s credibility.  There are numerous benefits to having this level of trustworthiness. Positive reporting in your credit file can benefit you in many areas of running your business. 

How does your business’s credit affect your supplier’s energy offers and contracts?

If your company has a low credit score, little credit history, and operates in a “higher risk” industry, you may not have many options for energy suppliers and rates options. 

Some energy companies will refuse to do business with poor credit companies, while others may charge a higher rate to compensate for the risk. So either improve your credit score or find suppliers that offer a higher rate.

There are many suppliers in the UK, such as Utility Bidder, to whom you can reach out and request quotes.

What other information affects energy supplier offers?

While credit score affects the offers given to you, there exists numerous information that suppliers look into:

• Business sector
• Annual energy use
• Location and sites
• Quoted fuels
• Supplier
• Your contract length

What factors affect your business credit score?

Like a personal credit rating, several factors can influence your company’s credit rating.

• Company size

The number of employees determines your company’s size.

• Bills Payment Time 

If you’ve had trouble paying bills on time, your credit score will suffer.

• Financial Applications

Applications for financing refer to the number of times you’ve requested financing, successful or not.

• Joined groups

Your company’s credit rating may be affected by the ratings of other companies in your group.

• Company Location

A high rate of bankruptcies or debt write-offs in your neighborhood could hurt your credit.

• Financial Director’s personal credit history

If your company’s directors have been associated with bankrupt companies, this could be viewed negatively.

So aside from paying on time, how can you improve your business credit score?

There are many ways to improve your credit score, but most of the time, paying your bills on time won’t be enough to make a big difference. 

People usually pay their gas, electric, and water bills, but this information is not sent to credit bureaus and is not included in their credit reports.

On the other hand, a business’s credit score is much more affected by handling loans and using credit cards and how well they have paid back debts in the past.

First, Check Your Business Credit 

• Obtain Your Records

There may be a problem with your credit report that you need to fix. In the UK, there are three leading credit reference agencies:

• TransUnion
• Equifax
• Experian

You have the legal right to a free credit report once every 12 months or within the first three months of receiving a credit denial, whichever comes first. After that, for a small fee, you can request a report at any time.

• Ensure your credit file is fair and accurate

A large number of customers have typos on their invoices. So it’s possible that the lender made a mistake, or there is identity theft.

If there is an error on your report, you are required to get in touch with the following parties:

• Current credit provider
• the credit reporting agency
• the office of the Privacy Commissioner – if needed.

Second, Decrease The Ratio of Your Credit Utilization

When figuring out a person’s credit score, credit reporting agencies look at the amount of credit used compared to available credit. Most of the time, it’s a good idea to keep this ratio under 15%.

Here are some things you can do to make that happen:

• Pay off your balances. 

This may seem like a no-brainer, but it will ensure that the ratio decreases. Even if you can’t pay them off ultimately, pay as much as possible.

• Raise your credit limit. 

Just ask your credit card company to raise your limit, and the ratio will decrease.

• Spending less on credit cards

Keep up the excellent work by spending less money on credit.

• Start a new credit line.

This may seem confusing, but why would you want to have more credibility if you don’t plan to use it? But, again, it’s all about balance. Credit reporting agencies will see you in a good light if you have more credit and don’t use it.

• Pay your bills more than once a month.

Your ratio will stay low because your spending won’t pile up over the month.

Third, Establish Credit Accounts With Suppliers

If you work with that supplier regularly and have a positive payment relationship with them, opening a credit account is a great way to increase the number of positive payments on your file. 

When you are in charge of a company, you must maintain positive relationships with your clients and suppliers. In addition, a prosperous company needs assistance from a variety of external sources.

If you have a good relationship with your suppliers, you will know that you can get a steady supply of goods without paying for them in advance. That deal with a supplier to obtain goods without paying for them upfront is referred to as “trading credit.”

Many new business owners use trade credit without fully understanding it. If you want your business to succeed, you must know the benefits and drawbacks of trade credit.

Takeaways

Suppliers determine which energy deal to offer your company based on your company size, type, location, and other factors.

However, your business credit score continues to be a significant factor in whether energy suppliers will offer you a deal because it equates to your credibility, specifically your ability to pay the debt on time.

 

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