Your energy supplier will check your credit score when assessing deals
Energy bills can make a significant dent in your business earnings, especially in these trying times when prices are on the rise. There are several factors contributing to your energy prices, from your agreed contract to your usage and more, but what many businesses might not realise is that credit score also has a part to play.
Understanding the relationship between credit scores and energy prices can provide you with greater knowledge regarding how much you should be expected to pay for your utilities. We’re going to take a closer look at this topic and outline some steps you can take to spend less.
The impact of poor credit on energy
Energy suppliers will check a limited company’s credit score as reassurance that your organisation is legitimate. It’s one way of assessing the financial risk involved in supplying your utilities.
A business is rated on a scale, just like a personal credit score. If your business has been struggling with missed or late payments, this can impact your credit score. Likewise, new businesses will likely have a lower score due to the lack of information available.
But despite energy suppliers checking your credit score, there are still plenty of suppliers who are willing to provide utility contracts to low-scoring organisations.
What if your business has a bad credit score?
Bad credit scores won’t impact your business’s ability to switch energy suppliers, but you may find that you don’t have access to the most competitive deals out there.
When you have a bad credit score, you may face certain challenges, including access to a smaller number of energy deals, access to a smaller number of energy suppliers, and higher energy prices overall.
However, energy companies will take other factors into account as well, including the size of your business, the industry, your annual energy consumption and your Standard Industrial Classification (SIC) number – which assesses large amounts of economic and statistical data to give your company a risk level.
Can you improve your business credit score?
Improving your credit score takes time and dedication, but there are a few good practices you can put in place to get those numbers up. These include taking out a business credit card and using it responsibly and making sure to pay your invoices on time.
Applying for credit regularly can put a dent in your business score, so limit your credit applications. You should also make sure that all records are present and correct with your credit referencing agency. An incorrect missed payment could be impacting your credit score without you even realising.
Should you seek out a better energy deal?
Regularly comparing energy prices is something that all businesses should make a habit of, whether or not you have a low credit score. This can give you a better idea of what’s available and how your current deal compares.
With the energy market in such a turbulent state right now, it’s also important for businesses to seek out support to help them navigate through the tough times ahead. That’s where Consultiv Utilities comes in.
With years of experience under our belts, we can help you master your energy management, find the most competitive price, and hit your sustainability goals. We’ll take a holistic look at your business to determine what steps are necessary for you to make the most of your energy.
Reach out to a member of our team today and find out how we can help you. Get in touch with the team at Consultiv Utilities.