How is company credit rating arrived at?
Discussion
It feels like a bit of a mystery to me how our small company can get crazy amounts of credit from some suppliers and none from others. I struggle to see any consistency.
We've been trading for just over 2 years as a micro-entity. We have no assets on paper yet we often get 30 - 60 days credit - sometimes quite large sums.
We have a policy of paying on time so I can understand existing suppliers increasing credit but we have on occasion sent of credit forms and suppliers have come back to us with 6 figure credit limits! On other occasions, we get what we would expect for a company with no assets - no credit.
I'm not sure what we need to do to improve our rating with those who won't initially offer us credit and how the rating is arrived at in the first place.
We've been trading for just over 2 years as a micro-entity. We have no assets on paper yet we often get 30 - 60 days credit - sometimes quite large sums.
We have a policy of paying on time so I can understand existing suppliers increasing credit but we have on occasion sent of credit forms and suppliers have come back to us with 6 figure credit limits! On other occasions, we get what we would expect for a company with no assets - no credit.
I'm not sure what we need to do to improve our rating with those who won't initially offer us credit and how the rating is arrived at in the first place.
Some suppliers use credit reference agencies such as Creditsafe, Dunne & Bradstreet etc, some use discretion based on their appetite for risk.
The info used by credit reference agencies is always out of date, and Creditsafe in particular uses an algorithm that renders it pretty much useless (to me).
The info used by credit reference agencies is always out of date, and Creditsafe in particular uses an algorithm that renders it pretty much useless (to me).
Al Gorithum said:
Some suppliers use credit reference agencies such as Creditsafe, Dunne & Bradstreet etc, some use discretion based on their appetite for risk.
The info used by credit reference agencies is always out of date, and Creditsafe in particular uses an algorithm that renders it pretty much useless (to me), but they look at things such as the number of Directors, type of industry, net worth etc.
The info used by credit reference agencies is always out of date, and Creditsafe in particular uses an algorithm that renders it pretty much useless (to me), but they look at things such as the number of Directors, type of industry, net worth etc.
I'm in a similar position. Two years trading both showing healthy profits with impeccable payment history with suppliers yet the worst credit rating you can get. I have no need for any form of bank lending but I tender for public sector work and credit checking is sometimes a scored factor. It would be unusual for this to win or loose me a bid on its own but some decisions are sometimes made on the most marginal degrees so looking to address this.
From what I've determined, it's a case of finding a financial institution to give you credit so am currently looking a business credit cards. I have no need for one but if it helps boos the credit score then fine.
From what I've determined, it's a case of finding a financial institution to give you credit so am currently looking a business credit cards. I have no need for one but if it helps boos the credit score then fine.
Al Gorithum said:
Some suppliers use credit reference agencies such as Creditsafe, Dunne & Bradstreet etc, some use discretion based on their appetite for risk.
The info used by credit reference agencies is always out of date, and Creditsafe in particular uses an algorithm that renders it pretty much useless (to me).
What do you use instead? The info used by credit reference agencies is always out of date, and Creditsafe in particular uses an algorithm that renders it pretty much useless (to me).
I use creditsafe and find it is behind the curve all the time, no intelligence just regurgitation of companies house data. We had a large client go into administration last year and the creditsafe service was a week late updating and notifying us. I complained and got nowhere. They have some of their own ‘community’ intelligence risk imfo which ironically had us down as having debts more than 4 months old which was completely untrue. I am loathed to renew with them in June (the unsolicited sales calls to pressure me to commit early are the icing on the cake), so any other services that are better would be of interest.
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