Commercial Credit Scores

Difference between personal and commercial credit scores

Commercial credit scoring is concerned with the credit status of a company or business as opposed to an individual.

It could be argued that the credit score of an individual who is a sole trader or part of a partnership should influence the score of the business in which they are involved. Currently however, privacy and data protection laws prevent an individual's credit status being accessed by any organisation other than banks, credit card companies and insurance providers etc.

Commercial credit scores are based on company data available within the public domain. At ukdata.com we use statistical analysis to provide a Risk Score. The lower the score the higher the risk.

By analysing companies over a 12 month period we identified the key data variables essential in predicting the probability of a company becoming insolvent within the next 12 month period. These variables were run against our entire database of companies and through statistical analysis, an appropriate risk weighting was assigned to each variable. Through the calculation of these key variables, combined with current variables we generate the credit score.

Purpose of a Commercial Credit Score

The Risk Score predicts the likelihood of a company becoming insolvent within the next 12 months.

Definitions of the Scores

71-100 Very Good Credit Worthiness
51-70 Good Credit Worthiness
30-50 Credit Worthy
21-29 Credit Against Collateral
0-20 Caution - Credit at your discretion

There are other scores detailed in our help page Understanding Credit Reports.

Variables used to determine a Commercial Credit Score

  • Age of Business - A newer company wouldn't be penalised for it's age, but an older company will have more history to assist with a calculation.
  • Size of Business - Small and Medium sized companies are scored using a separate calculation to large sized companies.
  • Financial Performance - Net Worth, Cash etc is compared to previous years and with similar sized companies.
  • Age of the Accounts - Analysis has shown that small sized companies who file within the final 15 days of their due date are almost three times more risky than a company who files in good time. For large companies No Rating is provided if the accounts are filed late.
  • Ratio Analysis - Return on assets employed etc.
  • Independent Auditor Comments - Any adverse comments would affect the score.
  • Director History and Performance - If a director is associated with companies which are insolvent or have adverse information this may affect the score. The number of directors and changes within the management of the company is also considered?
  • Group Influences - If the company is part of a group, the companies within the group will also be analysed to look for adverse information such as insolvency. Such information would affect the score.
  • Demographics - Where the company based may have an affect on the score if the area has seen an increase in insolvencies.
  • Mortgage Data - The amount and number of mortgages against the company will also affect the score.
  • Industry Insolvencies - Analysis across the country and carried out and adjusted quarterly.
  • County Court Judgements - The frequency and amount of CCJ's affect the score, as do the value of them.
  • Filing on Time - Any documents which are over due for filing at the registry would suggest an increase in risk.
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