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Does My Credit Score Affect My Business Energy?

Every business will explore costs and try to reduce them whenever feasible. Business gas and electricity prices can make a significant difference to a company’s profit margin.

Taking the time to explore the energy market to find the best business energy prices can be a great way to reduce bills.

Here at Business Energy Comparison, we are dedicated to helping our customers find and compare business energy suppliers.

We also want our customers to know what can affect business gas and electricity prices so they have a better understanding of the market.

This article is dedicated to exploring how your credit score will affect you in finding the best business energy tariffs.

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What Is A Business Credit Score?

Business credit scores determine the financial risk involved with lending. The score is set between 0 and 100 with 0 representing the highest risk and 100 representing the most trustworthy businesses.

This is relevant to energy suppliers as many business energy tariffs are paid in arrears. This means the business gas and electricity have already been supplied.

It is not in the best interests of an energy supplier to work with companies that will be difficult with payments.

How Is A Business Credit Score Calculated?

A business credit score is based on a number of factors. These include:

  • Company size
  • Credit history
  • Payment history
  • Industry risk
  • Debt
  • Debt usage

Risk management is an important part of business energy deals. Lenders must be confident that business energy contracts will be honoured. In some cases, a business may be trustworthy but the industry itself is volatile and demands closer scrutiny.

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Why Do Energy Suppliers Check Your Credit Rating?

Business energy suppliers typically provide a form of credit. The business electricity and gas that is used will then be paid for by the company.

The energy supplier must be confident that the business is legitimate and not at risk of bankruptcy or closure.

They need assurances that you will pay your business energy bills on time.

What Other Information Do Suppliers Use When Negotiating Energy Rates?

Energy providers will always consider the business credit score when negotiating business energy prices. Other factors that will be considered are the energy needs, location, and size of the business.

A business’s energy consumption will make a difference in what kind of tariffs are available to them.

Small and medium enterprises are most commonly found in the UK. However, large business energy needs can sometimes help with negotiations. This could be based on one large site or multiple sites across the UK.

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How Can Your Business Credit Score Affect The Terms Of Your Energy Deal?

Low business credit scores will limit choice. It is generally accepted that scores of 40 or above will help to get you cheaper energy deals. This is because there is less risk involved for the supplier.

Some suppliers won’t supply business energy to those with low credit scores. Those that do will provide limited options.

What Is The Impact Of A Bad Business Credit Rating?

A bad business credit rating will impact the ability to compare business energy prices. This can result in a limited business energy supply choice and having to pay more.

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Why Do I Need A Prepayment Meter?

If your credit score is very poor, it is possible to install a prepaid energy meter. This removes the credit facility and allows you to pay in advance.

This gives businesses greater control over the energy they use and can be a great way to implement greater energy efficiency.

It removes the potential for surprise bills and gives customers the freedom to switch energy suppliers.

Unfortunately, it is not all good news. The unit rates for pre-paid energy meters tend to be relatively high. The tariffs available are also quite limited.

Another downside is that you must keep on top of your energy usage to ensure you do not run out of credit.

Can I Improve My Business Credit Score?

There are many ways you can improve your business credit score. These can include:

  • Providing full accounts to Companies House if you are a limited company.
  • Ensuring you pay all of your bills on time.
  • Ensure your business bank account has sufficient funds to cover bills and expenses.
  • Limit the credit you apply for. Multiple attempts to gain credit can flag up and look like your business is struggling.
  • If you are considering credit, request quotes rather than making applications.
  • Speak with suppliers that you have a good working relationship with and ask them to share payment records with credit agencies.
  • Ensure the information you share is up to date.
  • Ensure you use a business bank account so everything is accountable.
  • Work with other businesses that have good credit scores and avoid those with bad ones.

This list is not exhaustive. The best way to improve a credit score is by displaying good financial management over a significant period of time.

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Does Switching Energy Suppliers Affect Your Credit Rating?

Switching energy suppliers can affect business credit scores. This is because energy companies will perform credit checks.

However, this should not be a long-term issue and ensuring you pay your bills on time will help to improve your score.

Switching Business Energy Suppliers With A Low Credit Rating With Business Energy Comparison

The idea of switching to a business energy supplier is daunting to many businesses. This is because of the time and effort required to get quotes. Each energy company requires certain information and then you will have to monitor replies and compare the offers.

Thankfully, Business Energy Comparison makes it easier for businesses to find the best prices and save money.

Our expert team of business energy brokers and consultants is available to answer any questions you may have. They will also help the transition go smoothly so you can concentrate on your job.

All we need to provide you with business energy quotes is the business address. We have access to industry-held data to check your energy usage patterns and existing supplier.

We can then provide you with a range of quotes from some of the top UK energy providers.

Conclusion

If you aren’t satisfied with your current energy supplier our comparison service can make it easy.

We work with a range of different suppliers and can even help businesses with poor credit scores.

As well as offering business electricity and gas services, we also compare business utilities. This helps businesses reduce bills and save even more money. In some cases, we are able to reduce business electricity and gas prices by as much as 45%.

We help businesses across the UK by removing the time and inconvenience of having to contact individual energy suppliers. We can provide you with quotes in minutes and ensure the switchover takes place without a hitch.

If you are looking for a way to reduce your business energy and utility bills, get in touch with us today.

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Frequently Asked Questions

Who calculates business credit scores?

Business credit scores are calculated by lenders, banks, and credit agencies.

What is the Energy Bill Relief Scheme?

This is a scheme put in place by the UK government to help businesses with rising energy costs.

Business customers are not eligible for the price cap that domestic consumers in the UK benefit from.

Instead, the Energy Bill Relief Scheme has implemented the EBDS (Energy Bill Discount Scheme) which is in place from April 2023 to April 2024.

Can I get my business energy and gas from the same supplier?

Some business energy suppliers offer dual fuel tariffs to consumers. This allows them to get their gas and electricity from the same supplier and improves convenience.