'Lucky dip' for SMEs over credit rating as accountancy firm finds big disparities

Shelley Stock Hutter, which investigated credit agencies Dun & Bradstreet, Experian and Creditsafe, said they returned different credit ratings and suggested different credit limits for the same companies.

The London-based firm said this could lead to companies unable to grow their business, trade with suppliers or lease equipment, and, in extreme cases, forced to cease trading.

Experian said its commercial credit scores were based on a "robust and consistent" analysis of factual data, while Creditsafe said it was inevitable that there would be variations in certain company ratings.

The research, which investigated credit ratings and limits of 24 SMEs during October and November 2010, found one agency recommended no credit limit for one company, whilst another recommended a limit of 50,000 for the same firm. In the case of another business, one credit agency recommended a credit limit of 43,000 whilst another recommended a limit of 17.5m.

Bobby Lane, a partner at Shelley Stock Hutter, said: "Our investigation shows it is very much a lucky dip for SMEs when it comes to getting a fair credit rating and recommended limit. This is particularly worrying in the economic climate when so many SMEs need to prove their viability to investors, suppliers and banks."

He urged SMEs to submit up-to-date management information to credit agencies.

An Experian spokesman said: "Experian's credit reports have been shown to be the most predictive of risk available, reflecting the individual circumstances of a business and based entirely on factual information compiled from a range of sources."

He added: "Research has shown that, at the SME level, an organisation's future credit performance is strongly reflected by the previous personal credit performance of its principals. Experian's commercial credit scores are based on a robust and consistent analysis of this factual data."

A Creditsafe spokesman said: "Each credit information provider employs its own methodology for calculating a credit score or limit, which will undoubtedly lead to variations in certain company ratings.

"Our credit ratings are the most predictive in the marketplace and thousands of companies rely on our business intelligence to make informed credit decisions."

Dun & Bradstreet could not be reached for comment.