Do I need permission to check a business credit score?

There are 3 main legal types of business;-

 

Limited Companies

Sole trader

Partnership

 

Anyone can run a credit check on a limited company with no permission as the information on limited companies is in the public domain.

With Sole traders and partnerships, this is more of a grey area.

 

If you are doing a basic online search on the business name at the business address through our website then you do not require permission.   

 

Our recommendation to clients on checking out sole traders and partnerships is to always obtain their residential addresses, as they are personally liable for business, therefore you should run a credit check at the home address as well as the business address.

 

In these cases, you will need permission from the subject as your search at their residential address will leave a footprint.

 

Information on any prospect should be initially gathered through the business filling out a credit application form, which should be signed by one of the owners. Part of the application form should include a paragraph stating that you will run credit checks on both the business and the individuals where applicable.

 

 Creditserve.

 

In this article, we’ll explain more about the process of checking a business credit score and whether or not you should let a business know that you’re running a credit check.

credit score business credit score

The process of checking a business credit score

So, you are in contact with a new business that you are looking to work with in the future and you wish to check their business credit score. When running a check with Creditserve, head to our online shop to purchase your package; one check, 50 checks, 350 checks or unlimited checks. 

 

When carrying out a company credit check with us, you’ll need to know the name of the company that you’re searching for or their company registration number. With our software, you can search by the company name, company number or postcode. You’ll also be asked to input whether the company is limited or non-limited. You can also filter your search to include dissolved companies.

 

Once all the correct information has been inputted, this should pull back the company in question or perhaps a small list of companies to choose from. Simply select the correct one and receive your credit report.

 

Our system will present the following information for you to review:

 

  • Credit limits
  • Risk scores
  • Company incorporation details
  • Individual directors including other directorships
  • Shareholders and their shareholdings
  • Mortgages and charges
  • Five years of financial data where available
  • Legal notices
  • CCJs

 

To get a better idea of what to expect from a company UK credit check, view our sample report.

 

Should I tell a business that I am checking their business credit score?

Whether or not you tell a business that you are checking their business credit score is totally up to you. You are not obliged to, however, it’s also not something you should feel the need to keep quiet about either as checking credit scores is pretty commonplace when doing business responsibly. 

 

It’s worth mentioning that this is not the case when running an AML check. When running an AML check, the subject of the enquiry must be made aware that the search will be carried out on them.

 

I’ve checked the business credit score and it’s low - what now?

So, what do you do if you’ve checked the business’s credit score and read through their credit report and things aren’t looking great? At what point do you rethink the situation and potentially decide to decline to work with them? 

 

Firstly, if you’re unsure what constitutes a bad credit report, these are a few of the red flags to be looking out for:

 

  • Outstanding debts
  • Insolvencies
  • A history of CCJs
  • Poor financial records
  • Poor credit history
  • Directors having failed other companies

 

If you’ve spotted these red flags and you’re not comfortable going ahead, you can politely decline the relationship. Alternatively, you may decide to go ahead with the partnership and take the risk. Perhaps you know that their market is set to do well this year or you know that there is a good reason why their credit report doesn’t look great. If you do decide to go ahead, it’s a good idea to take a few steps to protect your business, such as perhaps implementing a proforma invoice policy. 

 

Working with a Limited Company

 

When dealing with a limited company with a poor credit score, a potential supplier could also look to seek personal guarantees from the directors and or shareholders. 

 

Business credit reporting 

 

If you’re looking to back a business credit score and review a business credit report, look no further than us here at Creditserve. We’ve been in business for more than 25 years and many of our clients have been with us since the beginning. We pride ourselves on providing a combination of speed and cost-effectiveness and online credit reporting with a very personal service. 


Choose from a range of online credit reporting services, from business credit checks, international credit checks, AML searches and more. Head to our online shop to purchase your package or to get in touch, please give us a call on 01992 414222 or email sales@creditserve.co.uk.