Does my credit score affect business energy prices?

What Ofgem says

Ofgem's microbusiness guidance states that a supplier isn't obliged to accept you and may decide using things like the size of supply or credit rating. Separately, it explains that supplier prices include a charge for bad debt, which covers customers who can't pay. So credit risk matters to suppliers at the level of the business and the whole market.

We did not find a published formula showing how much a particular score moves your unit rate, so treat any such promise with caution.

What a weak profile can lead to

• A refused application from some suppliers.
• A security deposit before supply starts; see are deposits refundable.
• Different payment terms, such as a requirement to pay by direct debit.

Whether the unit rate itself changes is up to the supplier, so compare several quotes.

How checks work

Suppliers may run a credit check on the business as part of the application. See business energy credit checks. Suppliers do not publish exactly which credit reference data they use, and for a sole trader there is no separate company record, so ask the supplier what it checks and whether the search leaves a mark on your file.

What you can do before applying

1. Request your own business credit report and fix mistakes.
2. Pay existing energy and supplier bills on time.
3. Make sure company details match Companies House records.
4. Apply to several suppliers rather than relying on one answer, and ask for any deposit terms in writing.

A rejected application is not necessarily the final word. Another supplier may assess the same business differently.

Example

A start-up bar with a thin credit history is asked for a £2,000 deposit by one supplier. With a monthly bill of about £650, that is £2,000 ÷ £650 = just over three months of bills. A second supplier asks for less, or accepts direct debit. Comparing both helps, and the figures are only illustrative.

Why quotes can differ

Two suppliers can look at the same business and reach different views. One may accept direct debit as sufficient comfort; another may want a deposit. That is why asking several suppliers, or a broker with access to many, can show a gap that a single quote would hide. Check any broker cost in the Principal Terms.

If you are turned down, ask the reason in writing. It might be a simple error in company details that is quick to fix.

Keeping your profile healthy

Pay on time, keep company filings up to date and avoid several credit applications in a short period. Small steps like these can make suppliers more comfortable.

What not to do

Don't pay a firm to "repair" your credit file without checking exactly what it will do; errors can usually be corrected for free by contacting the reference agency directly. And avoid giving personal guarantees without understanding what you would owe if the business could not pay.

Next steps

• If you owe money to a supplier, read can I switch if I owe money.
• If you're struggling with bills, see what to do if you cannot pay.