Future proof your business with a credit check

Here, we look at the importance of carrying out a credit check for your business.

In today’s world, we all know that a business owner or director’s personal credit situation can have an impact on the business. Whether finance is required for a new venture, you want to buy or rent business premises, make a large purchase or even just provide your employees with business credit cards, it’s essential you find out where you stand. To find out what your credit report says about you, you need to carry out a credit check.

Not everyone is aware that they are able to carry out their own credit check, and see what lenders and potential landlords can find out about them. You can carry out your own credit check at Experian.

How you’ve managed your credit in the past could have a big impact on future business credit applications, for example, if you’ve had missed or late payments, unpaid debts or bankruptcy notices. You can find out more information at Experian credit check.

Speculation over a potential rise in interest rates early next year means that there is now a greater need than ever for you to make sure your finances are in order and that the information on your credit report is accurate and up to date.

Since March 2009 the Bank of England interest rate has remained at an all-time record low of 0.5 per cent. However, Bank of England Bank Deputy Charles Bean has indicated that UK interest rates could be on the rise again before Spring 2015. Good news if you’re a saver, potentially bad news if you want to borrow a business loan. Information about interest rates rises have been explained by Virgin Media, in an article that can be found here.

If you’re looking for new finance, a higher credit score could pave the way for better terms or lower interest rates. That’s why it’s essential that you carry out a credit check now, so you can get your house in order in plenty of time before any potential rises. Impartial body The Money Advice Service advises that if you want to be eligible for the most competitive loan and credit card rates, then you need to have a good credit score.

Some experts forecast that when the interest rates do rise, it will be in smaller steps over the next few years, rather than one huge leap. Some predict it will be in steps of around of 0.25 per cent, before peaking at 3 per cent in 2017. This might not sound like a lot, but according to the Office for Budget Responsibility (OBR), an increase of 2.5 per cent on the base rate would mean someone with a repayment mortgage of £150,000 would have to pay an extra £230 every month.

Acting now will allow you to ‘future proof’ yourself and your business. Getting a credit check now will give you plenty of time to get in control of your credit history before any potential interest rate rises next spring.

See also: Credit check for business account

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