Credit Building > Can you open a business bank account with bad credit?

Can you open a business bank account with bad credit?

Wollit Team2 minute read · Updated 29th June 2024

Yes, you can open a UK business bank account even if you have bad personal credit.

It doesn’t matter how your business is set up:

For a limited company, opening a bank account for a business is a legal requirement when registering one.
For sole traders, most banks do not run a personal credit check for opening a business account.

Either way, you should keep in mind that most of the business bank accounts that you can open without a credit check come with no overdraft. Still, if you only need to have one in order to get paid and pay for expenses, then this is sufficient.

What are the most popular business bank accounts available to small business owners with bad credit?

Most of the popular business bank accounts that accept applicants with bad or no personal credit history are the so-called “neobanks”.

These usually have a banking licence but have no bank branch and only offer banking through a mobile app:

Monzo Business;
Tide. Tide also offers a useful credit builder add-on that can help build your business credit score (but not your personal credit score);
Cashplus Bank: It also includes a business credit builder add-on to help your business build credit over time.

Other options are fintech companies that don’t have a banking licence but can also offer a business bank account. Here are some of the largest ones:

Wise Business;
Revolut Business;
Anna Money. Unlike other bank accounts, it can also help with your company admin and tax returns.

Can improving my personal credit score give me access to better bank accounts?

Yes. Improving your personal credit score can help your small business qualify for a bank account with an overdraft and even for dedicated lines of credit.

This is because when you run a small business, you’ll likely have to personally act as a guarantor for any loans your business takes. Lenders will have to check your credit file as well, and any business loans you personally guarantee will also show up on your credit report.

And if your business is registered as a sole trader business, then your personal credit score is actually your business score.

Luckily, now there are many apps that can help you build and improve credit.

One such app is Wollit. Wollit is an app available both on Android and iOS, and it works by reporting a fixed-fee monthly subscription as a loan repayment to all three credit reference agencies.

This builds your personal credit history and helps you improve your credit score. Eventually, a better personal credit history will mean access to better products for your business as well, from accounts with overdraft to business loans so you can keep running and even grow your business.