Retail sector leads on credit score recovery

With the average score 19.2 per cent higher than the same period last year, the retail sector is leading on credit score recovery, according to research from Experian.

The study, which analysed 2.2 million UK businesses, found that on average businesses’ credit scores are recovering well from the impact of the pandemic.

Business credit score levels were back up to the pre-pandemic average of 44 by September 2021, compared to a score of 40 throughout most of lockdown.

Experian said that the retail industry had shown resilience by shifting to digital platforms and continuing to serve shoppers despite restrictions, issues with global supply chains, and labour shortages. While credit scores in the sector are still on average below pre-pandemic levels, the average jumped sharply to 31 in September.

Unsurprisingly, the travel sector has fared worse, with average scores reaching a new low of 30.5 in September

“The UK business sector can be proud of what it has achieved over the last 18 months,” said James McGarva, managing director of business information services at Experian. “Despite ongoing pressures presented not only by the impact of COVID-19, but also other well-documented macroeconomic pressures such as labour shortages and global supply chain issues, the ability of businesses to adapt has been impressive.”

McGarva added: “By looking at business credit scores on a national scale, we can see how many businesses’ financial circumstances are improving, presenting a lower risk for lenders and therefore enhancing their prospects of getting access to the finance they need to thrive. We would encourage all businesses to keep a check on their credit histories and take steps to improve their scores where possible.”

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