Businesses looking to save on their energy bills should make sure they have a positive credit score before shopping around, as this is one of the main factors that affect the energy rates they’ll be offered by other suppliers.
Business energy suppliers undertake very complex pricing strategies and, unlike with household energy, the resulting energy prices aren’t published. This makes it very difficult and time consuming for businesses to shop around for energy without assistance.
Factors that affect business energy prices
Here are the main factors that will affect the rates suppliers will quote you:
- Your type of business
- Length of the contract you are looking for: 12, 24 or 36 months
- Payment method
- Company credit score
- Annual consumption
- Type of meter
Please note that many suppliers only offer their best energy prices to companies with a specific credit score. Make It Cheaper, an independent business energy comparison and switching service, calculates that 1 in 3 businesses are being denied the cheapest rates because they don’t reach the required ratings.
The companies with low or non-existent credit ratings have either to keep looking for a business energy provider or they are charged “out of contract rates”. These rates can be up to 3 times more expensive than the cheapest rates.
Tips for improving your credit score when changing energy companies
Check your score regularly
Experian and Equifax are the main credit score companies for SMEs. It’s important to check your score with them every year and to fill in information gaps (those are as harmful as a poor credit history). You should also make sure they have all your details right.
Pay before your deadlines
Your credit score is based on the amounts of outstanding debts you have and if you pay on time.
If your business doesn’t have a detailed credit rating some agencies will review the personal credit profile of key individuals.
Having many accounts opened will benefit you
It is positive to have facilities from various lending facilities, try to get different accounts opened instead of only one.
Don’t have too many credit checks done
It’s better to use a single comparison service that will search the whole market instead of being offered quotes by different providers. This is because the providers will most likely run credit checks on your company, which could harm your score.
Do your homework before shopping for business energy
As you can see, switching business energy providers is trickier than shopping around for your household energy. We encourage you to do your homework so that you can cut down on your energy bills effectively. This includes making sure you find out when the termination window with your energy provider opens.