Your business credit score in New Zealand

Your credit file is part of your paperwork, even if you’ve never seen it. When you apply for a business loan, the lender will usually check it before making a final decision, and what it finds can shape the amount, the terms and which lenders are open to you. Knowing what’s on it before you apply puts you in control.

Who holds credit information in New Zealand

New Zealand has more than one credit reporter. The main ones are Centrix, Equifax and illion. Each collects information from lenders, utilities, courts and public registers, and each may hold slightly different information about you. A lender might check one or more of them.

For a small business, lenders typically look at:

• The company’s credit file, if you trade through a company.
• Each director’s personal credit file, because directors usually guarantee business loans.
• Public records, such as the Companies Office register, insolvency records and court judgements.

What can be on a credit file

Item	What it means to a lender
Credit enquiries	How often you’ve applied for credit recently
Accounts and repayment history	Whether repayments have been made on time
Defaults	Overdue debts reported by a creditor
Judgements	Court orders to pay a debt
Insolvency events	Bankruptcy, no asset procedure or liquidation
Directorships	Companies you’ve been involved with, including failed ones

Not every lender reports everything, so files vary.

How lenders use your score

Most lenders turn credit information into a score and a set of flags. A high score with no flags makes approval easier and opens more options. A lower score, recent defaults or lots of recent enquiries narrows the field. Property-backed lenders are generally more willing to look past credit issues than unsecured lenders, because they can rely on the security. See bad credit business loans for how that works.

Check your own report first

You’re entitled to request your personal credit information from each credit reporter, and a standard request is free. Do this before you apply. Check:

• Every account listed is yours.
• Paid debts are shown as paid.
• Defaults aren’t listed twice.
• Your address history is right.
• There are no enquiries you didn’t make.

If something is wrong, ask the credit reporter or the business that listed it to correct it. The Privacy Commissioner explains your rights if they don’t.

Things that improve a score over time

1. Pay everything on time, including small bills like phone and power, which are easy to forget.
2. Limit applications. Each application can leave an enquiry. Several in a short period looks like credit stress.
3. Clear or settle defaults where you can, and keep proof.
4. Keep credit limits sensible and avoid maxing out cards.
5. Keep director details current on the Companies Office register.

Business credit and your company’s history

If you’ve been a director of a company that was liquidated or struck off owing money, lenders may see that history even if it wasn’t your fault. Be ready to explain what happened, what you learned and how the current business is run differently. Lenders also look at how long the current company has existed and whether its directors and address details on the Companies Office register are up to date. A company formed recently to replace an older one can raise questions, so explain the reason up front.

Enquiries: why fewer is better

Each formal application for credit can leave an enquiry on your file. One or two over a year is normal. Five in a month suggests you’ve been declined repeatedly or are under pressure, and the next lender will ask why. That’s why shopping your application to several lenders at once can backfire. One well-prepared application to a lender whose rules fit you is usually the better path. Enquiring with us doesn’t involve a credit check, so it doesn’t add to your file.

When your score isn’t great

A low score doesn’t end the conversation. Lenders weigh how old an issue is, how big it was, whether it’s been paid and why it happened. Write a short explanation for each item and include it with your enquiry. If you own property, a second mortgage or no doc loan may still be available.

An illustrative example

A Palmerston North electrician pulls his credit reports before applying for a van loan and finds a $1,100 default from a former landlord he’d never been told about. He contacts the landlord, pays the amount and gets written confirmation, and the listing is updated to show it’s paid. When he applies a month later, he includes a short note explaining it, and the lender approves the loan. Illustrative only.

Find out where you stand

Tell us what you need and anything you know about your credit history. There’s no credit check when you enquire, your details aren’t sent down a list of lenders, and one person will phone you to talk through which lenders suit your file. Honest answers mean no surprises later. Make an enquiry.