Business credit scores hold steady amid economic headwinds

The UK’s business ecosystem is once again at a crossroads. After a strong start to 2025, economic momentum has slowed. Inflation rose to 3.6% in June, GDP contracted for a second consecutive month, and business confidence remains subdued ahead of the Autumn Budget. SMEs are feeling the pressure, from tax adjustments to global trade disruptions, but they’re also demonstrating resilience.

In this environment, business credit scores offer a stabilising signal. They reflect how businesses are managing financial obligations, adapting to change, and positioning themselves for future growth. While the broader economy faces uncertainty, credit performance across the SME sector is holding firm.

A business credit score explained

A business credit score is more than just a metric, it’s a strategic asset. A business credit score is the measure of a company’s financial health and creditworthiness. It’s calculated using factors such as payment history, financial filings, and public records. The Experian Business Credit Score is based on a scale from 1-100, with scores above 80 considered excellent.

Lenders, suppliers and investors use these scores to assess risk and determine terms of engagement. A strong score can unlock better financing options, more favourable supplier terms, and increased investor confidence. Equally, a weak score can limit access to capital and slow down growth.

In today’s lending climate, where affordability is under scrutiny and product innovation is reshaping the market, credit scores are central to decision-making. They help lenders quickly gauge the likelihood of repayment and allow businesses to benchmark their financial standing.

An industry view

Experian’s latest data shows that lending activity in Q1 2025 was robust, continuing the trajectory seen throughout 2024. Lending volumes picked up pace, driven by increased demand and renewed confidence from traditional lenders. However, Q2 saw a shift. Growth in high-volume, low-value lending suggests SMEs are borrowing to manage working capital rather than fund expansion.

Commercial Buy Now, Pay Later (BNPL) products are gaining traction, particularly among SMEs seeking flexible finance options. Meanwhile, delinquency rates have stabilised across most product types, with asset finance being the exception, where deterioration continues.

These trends reflect a cautious but active lending environment, one where business credit scores are increasingly influential.

The road ahead

The UK business sector continues to show resilience in the face of economic uncertainty. As we approach the Autumn Budget and navigate ongoing fiscal and policy shifts, maintaining a strong credit profile will be essential.

Whether you're a lender assessing risk or a business seeking growth, credit scores offer clarity in a complex market. They’re not just a reflection of the past, they’re a signal of future, and a foundation for confident decision-making in uncertain times.

Seven steps to improve your business credit score

1. View your business credit report to understand the positive and negative factors in your history and plan the best path for progress.
2. Make a note of suppliers’ payment terms and plan payments so they are made on time. Poor payment performance can indicate a business struggling to service its debts.
3. File annual returns and financial accounts on time. Making more information available helps suppliers, utility providers and lenders to understand your business and make appropriate decisions.
4. Avoid County Court Judgments. Should one occur, settle it promptly.
5. Keep an eye on your personal finances. Directors’ personal credit scores can be considered for new businesses when little information is available.
6. Appoint a director with a strong history of running companies and a good credit score to help boost your company’s standing.
7. Check and monitor the credit status of the companies you work with, so you can anticipate any supply chain problems before they affect your business.