How a Company Can Improve Its Credit Rating — A Practical Guide

If your business has recently received a disappointing credit rating from a credit agency like Experian, you're not alone. Many companies find themselves facing lower-than-expected scores due to a combination of industry conditions, financial trends, or even incomplete information.

So, what can you do to improve it?

Let’s break it down into plain language and walk through some steps your business can take to strengthen its credit profile over time.

Understanding What’s Hurting Your Score

First, it helps to know what’s behind a poor credit score. In one recent case, a company was told that while they had a positive mark for timely filing of their annual return, their credit score had dropped because of several key issues:

• Their industry sector was considered high-risk

• There was a decline in fixed assets

• The percentage change in shareholders' funds was negative

• And there was a drop in total assets

Each of these factors paints a picture of a business that may be shrinking or facing financial pressure. While some of this may be out of your control (like the industry you’re in), many aspects can be improved over time with careful planning.

Strengthen the Financial Foundation

One of the most important ways to improve your credit rating is by increasing the strength of your company’s financial base. This starts with shareholders’ funds — essentially, the equity left in the business after liabilities are taken into account. If your shareholders' funds are decreasing year over year, credit agencies interpret that as a weakening position.

To turn this around, focus on improving profitability, reinvesting earnings back into the business, and avoiding large dividend payouts or capital withdrawals unless necessary. You want to demonstrate growth and stability — two things credit models reward.

Grow (or Stabilize) Your Asset Base

Another big red flag for credit agencies is a drop in total assets. This could mean you’re selling off equipment, using up cash reserves, or reducing stock — all signs that the business might be contracting. It’s okay to streamline, of course, but from a credit perspective, growth is a good sign.

Where possible, invest in areas that add long-term value — whether that’s inventory, new technology, intellectual property, or infrastructure. This also ties into fixed assets, which are things like equipment, vehicles, or property. A solid base of fixed assets shows a commitment to long-term operations and signals stability.

Tackle the Industry Factor

Sometimes your score takes a hit simply because of the sector you’re in. For example, construction, hospitality, and startups are often seen as higher risk — regardless of how well your specific company is performing.

You can’t change your industry, but you can show credit agencies that you're managing risk better than most. Consider providing commentary or context when submitting financials, especially if you’ve diversified your offerings, expanded into less risky markets, or built a strong customer base. Some agencies even allow you to submit supporting information that could be taken into account in a manual review.

Keep Filing on Time

One positive note in the feedback we mentioned earlier was that the company filed its annual return on time. That may seem like a small thing, but it actually matters a lot. Timely filings show that the business is active, compliant, and properly managed.

Make sure you continue to file annual returns, financial statements, and any required documents with regulators and credit agencies on schedule. If your accounts are overdue, or if there’s a gap in the information available, your score can drop quickly — even if the business is otherwise healthy.

Build a Positive Payment History

One of the most effective ways to boost your credit score — and often the quickest — is by developing a consistent record of on-time payments. Credit agencies track how promptly you pay suppliers and creditors, and this directly feeds into your rating.

Pay your bills on time. If you’re struggling, be proactive and negotiate terms with suppliers before payments fall behind. If you have good relationships with vendors, you might also ask them to report your positive payment history to credit agencies — not all do this automatically.

Engage with the Credit Agency

Finally, don’t be afraid to engage directly with credit agencies like Experian. Request a copy of your business credit report and review it carefully for errors or outdated information. If your situation has improved — say you’ve secured new funding, launched a successful product, or reversed losses — you can ask for a manual reassessment or submit updated financials.

Credit ratings aren’t set in stone. They’re designed to reflect risk in real time, and if your business improves, your score should too.

Use a service such as Credit Focus to monitor your company credit score and check on your partners and clients before extending credit.

A Long-Term Process — But Worth It

Improving your credit rating doesn’t happen overnight. In the short term, you can focus on correcting data, paying bills on time, and keeping filings up to date. Over the medium to long term, it’s about building a stronger business — growing assets, boosting equity, and demonstrating resilience.

Credit scores can affect everything from supplier terms to loan approvals. So even if you’re not looking for credit today, it pays to invest in your creditworthiness now.

If your business has taken a hit, don’t panic — but do act. A solid, consistent improvement plan can turn things around faster than you might think.