Thoughts

How reliable is the data behind your credit decisions?

You pull a credit report. It shows a score, a risk band, maybe a recommended credit limit. It looks authoritative. It feels like enough.

But here's a question most credit teams never think to ask: how reliable is the underlying data that score is built on?

Not the score itself — the raw information it's derived from. The statutory filings. The accounts. The registered details. Because if the foundation is shaky, everything built on top of it is a guess dressed up as a decision.

The filing gap nobody talks about

In the UK, there are nearly 5 million companies on the active register.¹ Every one of them is required to file accounts with Companies House.² In theory, this creates a rich, publicly available dataset that credit reference agencies, lenders, and suppliers can use to assess risk.

In practice, the picture is far less complete than it appears.

Start with timing. UK private companies have up to nine months after their financial year-end to file their accounts.³ That means a company with a year-end of March 2025 doesn't have to file until December 2025⁴ — and if they use every day of that window, the data on the register could already be 21 months old by the time you look at it.⁵ Nine months of trading plus nine months of filing window. That's not a snapshot. That's archaeology.

Then there's the volume of late filers. Companies House issued 317,985 late filing penalties in the year ending April 2025.⁶ That's nearly 318,000 companies whose filings arrived after the deadline, which means the data you're relying on was even later than the already generous filing window allows.

And it's getting worse, not better.

What's actually in the filing?

Even when filings arrive on time, the question is, what do they tell you?

Under current UK law, micro-entities, companies with turnover under £1 million, a balance sheet under £500,000, and fewer than 10 employees can file heavily simplified accounts.⁷ No profit and loss statement. No detailed notes. Just a basic balance sheet.⁸ They can also claim audit exemption, which means the accounts haven't been independently verified.⁹

Small companies can file abridged accounts that omit significant detail.¹⁰ And until very recently, they could also file filleted accounts — stripping out the profit and loss entirely before submitting to Companies House.¹¹

The result? For a huge portion of UK businesses — and many of the SMEs that suppliers sell to on credit — the publicly available filings contain the absolute legal minimum. A balance sheet with a handful of line items and no context.

As the Institute of Chartered Accountants in Scotland (ICAS) noted in their review of these provisions, the lack of detail in small and micro-accounts makes it difficult for lenders and creditors to determine the creditworthiness of small businesses.¹² The very people who need this data to make decisions can't get enough of it from the filings alone.

The reform that didn't happen

This was supposed to change. The Economic Crime and Corporate Transparency Act 2023 (ECCTA) included provisions requiring small companies and micro-entities to file full profit and loss accounts publicly for the first time.¹³ It would have been the biggest improvement in filing transparency in decades.

Then, in January 2026, the government paused the reform indefinitely.¹⁴ No replacement date. No timeline.¹⁵ Small companies can continue filing stripped-down accounts for the foreseeable future, and there's no obligation to publicly file profit and loss information.¹⁶

Which means the data gap isn't closing. It's staying exactly where it is.

What this means for credit decisions

If you're a credit manager assessing a potential customer, here's what you might actually be working with:

A balance sheet that could be up to 21 months old.⁵ No profit and loss statement.⁸ No cash flow information. No audit verification.⁹ And a filing that meets the legal minimum but tells you almost nothing about the company's current financial health.

Now multiply that across every customer in your portfolio. Every new application. Every credit review. The filing data isn't wrong, exactly — it's just incomplete. And incomplete data is dangerous, because it creates false confidence. The report looks official. The score looks precise. But the inputs are thin.

This is the coherence problem. Not every filing is equal. A company that files full, audited accounts 60 days after year-end gives you a fundamentally different quality of signal than a micro-entity that files an abbreviated balance sheet nine months late. Yet most credit tools treat both filings the same way — as inputs to a score, with no distinction for quality, completeness, or freshness.

Better questions to ask

The question isn't just “what does the credit score say?” It's:

How old is the underlying data? A score based on filings from 2024 tells you where a company was, not where it is. The gap between the filing date and today is the gap in your visibility.

How complete is the filing? A full set of audited accounts with detailed notes is a different quality of signal than an abbreviated micro-entity balance sheet. Both are legal. Both are on the register. But they don't carry the same weight.

How consistent are the filings over time? A company that switches from full to abbreviated filings, or starts filing later than usual, or changes its year-end — these are patterns. Not necessarily red flags on their own, but signals that deserve attention.

Has anything changed since the filing? A company's financial position can shift dramatically in the months between filing and today. Revenue can grow. Cash can dry up. Customers can default. The filing is a timestamp, not a live feed.

The shift from scores to stories

The credit industry has spent decades trying to compress complex financial reality into a single number. And for a long time, that was the best available option. But the limitations of that approach are becoming harder to ignore — especially when the underlying data is as variable in quality as UK statutory filings.

The shift happening now is from relying on a score to understanding the story. Not just “what did they file?” but “how reliable is what they filed, and what's happened since?”

That means looking at filing patterns, not just filing content. It means cross-referencing statutory data with real-time signals — banking activity, payment behaviour, industry trends. And it means being honest about what the filings can and can't tell you.

Because the most expensive credit decision isn't the one based on bad data. It's the one based on data you assumed was good.

Grand brings together a broad range of data source to give credit teams the full picture — not just a score, but the story behind it. Learn more at heygrand.com

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