14 June 2010 | Lindsay Clark
Although half of small and medium-sized enterprises recognise the importance of checking a customer or supplier’s credit score, only 28 per cent think it is important to check their own.
A survey of more than 500 UK SMEs, conducted by credit reference and research company Experian, details how suppliers from the SMEs market are not necessarily managing their credit scores to help them bid for work.
Experian’s research shows many SMEs may not understand what their credit score says about them and how they can influence it.
The study says the financial strength of UK businesses has improved in the past 12 months. The rate of insolvencies is stabilising but is yet to return to pre-recession levels.
Simon Streat, Experian’s head of SMEs for UK and Ireland, said: “Our analysis has found that 56 per cent of SMEs know it is important to use credit scoring to help them manage some of the financial risks associated with extending credit or a business loan to new customers. However, most do not appreciate the importance of knowing their own commercial credit score or the value they will gain by actively monitoring and managing it.”