Credit scores and credit reports

The info below is about your personal credit score (also known as your consumer credit score). Funders providing business finance will refer to the business owner’s personal credit score to determine whether they will grant funding to the business. It is important for you to understand how your consumer credit score works, and to ensure that, prior to applying to a funder, you know what your credit score is and how to improve it if it is not good. If you have not been paying your monthly instalments on time or in full, then this is recorded as ‘defaulting’, and you could be considered a high credit risk. However, if you have never been in arrears, you would be considered a low credit risk and therefore would likely be approved for funding. It is necessary to build up a credit history (i.e. to open accounts with retailers, and pay on time) so that you start to develop a good credit score, in case you ever want to get access to funding.