Business energy credit checks: how they work and what bad credit means

Why suppliers credit check businesses

Unlike a household on a price-capped tariff, a business signs a contract and the supplier carries the risk of unpaid bills. Ofgem's best-practice guide on security deposits says suppliers can ask for a deposit when their assessment finds a customer carries some credit risk. So before agreeing a deal, most suppliers assess whether you are likely to pay. That is why you may be asked for company details when you request a quote, and why a price quoted over the phone can change after the check.

What the assessment can involve

Ofgem says the supplier's process may include credit checks, an individual assessment of the risk of non-payment, an independent assessment (for example by insurance underwriters for larger customers) and reassessment during the contract. It also says suppliers should explain their assessment process and timescales to applicants. In practice, expect them to ask for:

• Your legal business name, company number or sole trader details.
• How long you have traded and the premises address.
• Whether you have owned energy debt before.
• Your expected annual consumption, which links to the size of the exposure.

The exact data a supplier uses and the scoring thresholds are its own. We have not verified specific credit agencies or score cut-offs, and they differ between suppliers.

What bad credit changes

If a supplier judges you higher risk, the usual outcomes are:

• A security deposit or advance payment. See security deposits.
• Different payment terms, such as monthly billing instead of quarterly. Ofgem's guide notes a quarterly-billed customer would usually face a higher deposit than a monthly-billed one, all else being equal.
• Other protection, which Ofgem lists as credit insurance, bank guarantees or upfront payments.
• A refusal of a fixed contract, leaving you on a deemed or out-of-contract rate. These are often dearer, so see deemed and out-of-contract rates.

Prices for the same use can also differ between suppliers because each prices its own risk. This is one reason why the cheapest quote is not always the best.

Worked example

A small office uses 30,000 kWh a year. At the DESNZ Q2 2026 non-domestic average of 24.51p/kWh including CCL, the usage cost is 30,000 × £0.2451 = £7,353 a year, or about £613 a month. If a supplier asked for a deposit equal to three months' estimated use (an illustrative figure; each supplier sets its own method), that would be roughly 3 × £613 = £1,838. Standing charges and VAT would add to the true figure, so treat this as a rough guide only.

Does applying for quotes harm my score?

This is worth asking. Some credit searches leave a visible footprint and others do not. We could not verify how each supplier or broker searches, so before giving company details, ask the broker or supplier whether the check is a soft search or leaves a mark on your file. Avoid submitting many applications in a short time.

If you have been refused or offered poor terms

1. Ask why. Ofgem says suppliers should explain in writing why a deposit is requested, how it was calculated and what alternatives exist.
2. Check your own credit file for errors. For a limited company, look at the company's filings and any county court judgments.
3. Offer alternatives, such as monthly billing or Direct Debit.
4. Try more than one supplier. Their risk appetite differs.
5. Ask for a review later. If your position improves, you can request a partial or full deposit refund, per Ofgem's guide.

If you are with a broker, ask them to show which suppliers declined you and why, and to explain any commission, which must appear in your contract's Principal Terms. See broker commission.

Owing money to a supplier

Outstanding energy debt is a different issue. A supplier may object to a switch on those grounds. See switching when you owe money.

New businesses and start-ups

A business with no trading history may have little data to assess, so expect more questions or a deposit. Prepare a short note of your trading start date, premises and expected usage. Our guide to setting up energy for a new business covers the paperwork.

Credit checks on brokers' quotes versus direct

If you go through a broker, the broker usually collects your details and passes them to several suppliers. Each supplier then runs its own assessment, so you can receive different outcomes for the same business. Ask the broker which suppliers are being approached and why, and remember their fees must be shown in the contract Principal Terms for all non-domestic contracts signed from 1 October 2024. Our page on brokers, direct and comparison sites explains the differences.

Sole traders, partnerships and limited companies

The structure of your business affects what a supplier can see and who is liable. A limited company is usually assessed on the company's record, while a sole trader's own financial history may be considered because there is no separate legal entity. If you are a sole trader and also a household customer, remember that home energy and business energy are separate accounts with different rules; see business versus domestic energy. A supplier may also ask for a personal or director's guarantee on a new or higher-risk company. Before you agree to one, read what it makes you personally liable for, and consider getting advice.

Keeping a good record

• Pay on time and keep proof, as late payments can feed into future assessments and reassessments during a contract.
• Submit meter readings so that bills are accurate. See submitting a meter reading.
• Do not ignore a small bill dispute. Agree the disputed element in writing and pay the rest.
• Tell the supplier early if your circumstances change, such as a move or sale of the business.

Next steps

• Check your company and credit information is accurate before asking for quotes.
• Ask each supplier how it assesses credit and what it will accept as an alternative to a deposit.
• Keep paying on time, as that is what improves future terms.