Business Credit Checks Explained: What You Need to Know
What Is a Business Credit Check?
A business credit check (or company credit report) provides a financial profile of a company, including its creditworthiness, payment behaviour, and risk score. It helps you decide whether to extend credit, enter a contract, or trade with a business.
What Does a Credit Check Include?
A typical business credit report contains:
Company Overview
- Legal name, registration number, incorporation date
- Trading addresses, SIC codes, company type
- Current status and any events (CCJs, charges, winding-up petitions)
Credit Score and Rating
- A numerical score (e.g., 0-100) indicating creditworthiness
- A risk rating (low, medium, high)
- A recommended credit limit - the maximum amount you should extend
Financial Summary
- Key figures from the most recent accounts (turnover, profit, net assets)
- Trend analysis over 3-5 years
- Financial ratios (liquidity, gearing, etc.)
Payment Data
- Days Beyond Terms (DBT) - how late the company typically pays
- Payment trends - improving or worsening
- Industry benchmarks - how they compare to similar companies
Legal Events
- County Court Judgments (CCJs) - unpaid debts pursued through courts
- Charges - secured lending registered against the company
- Winding-up petitions - applications to close the company for unpaid debts
- Gazette notices - formal legal announcements
Directors and Ownership
- Current and former directors
- Persons with significant control
- Group structure and related companies
Free vs. Paid Credit Checks
| Feature | Free (Companies House) | Paid Credit Report |
|---|---|---|
| Company details | Yes | Yes |
| Accounts (raw) | Yes | Yes (analysed) |
| Credit score | No | Yes |
| Credit limit recommendation | No | Yes |
| CCJ data | No | Yes |
| Payment behaviour | No | Yes |
| Risk rating | No | Yes |
| Monitoring and alerts | No | Yes |
Free data from Companies House gives you the building blocks - you can review accounts, check directors, and look at filing history. But you'll need to interpret the data yourself.
Paid credit reports from providers like Creditsafe, Experian, or Dun & Bradstreet do the analysis for you, adding proprietary data sources like payment behaviour and legal events.
When Do You Need a Credit Check?
- Before extending credit - if a customer wants to pay on 30/60/90-day terms
- Supplier onboarding - checking a new supplier's financial stability
- Tender evaluation - assessing whether a bidder can deliver a contract
- Ongoing monitoring - keeping track of key customers' or suppliers' financial health
- Regulatory compliance - some regulated sectors require regular credit checks on counterparties
How to Interpret the Results
Credit score below 30 - High risk. Avoid extending credit without security. Check for CCJs, late filing, and negative net assets.
Credit score 30-60 - Medium risk. Proceed with caution. Consider shorter payment terms or smaller credit limits. Monitor regularly.
Credit score above 60 - Lower risk. Standard credit terms are likely appropriate, but continue to monitor for changes.
The NewcoSignal Approach
NewcoSignal doesn't provide credit data - we focus on discovering new companies at the point of registration. However, finding a company early through NewcoSignal and then running a credit check before engaging commercially is a solid workflow:
- Discover - find new companies via NewcoSignal alerts
- Research - review their Companies House profile
- Verify - run a credit check before extending credit
- Engage - reach out with confidence
Find new companies to research →
Related guides
About the author
Alexis Pratsides is founder of NewcoSignal and writes these guides from operating the data pipeline behind it. More about Alexis
Related Articles
What Is a Winding-Up Petition? A Guide for UK Businesses
A winding-up petition is a formal legal application to the court to compulsorily wind up a company. This guide explains what triggers one, what happens next, and how to respond.
What Is a Company Voluntary Arrangement (CVA)?
A Company Voluntary Arrangement (CVA) is a formal agreement between a company and its creditors to repay debts over time. This guide explains how CVAs work, who they suit, and what they mean for creditors.
What Are Net Assets? Formula and How to Read Them in Company Accounts
What net assets are, the formula, and how to read them in a company's accounts.
Ready to find your next client?
Get instant access to new UK company registrations, filtered by industry and location.
Get started free