Cracks in a business can be deeper than what you can see on the surface, and you may not have much time to react once they start to show. Prevention should be a priority.
Before you sign a contract or set up any payments, there are a few key checks you can make to spot risks early. Here’s the questions leading companies ask to manage risk and prevent fraud.
Here’s a scenario we hear far too often: you’ve chosen a supplier that seems trustworthy at face value. Six months later, the business is in trouble…and you quickly discover that this isn’t the first company under this director that has failed. Had you known this ahead of time, you may not have worked with them.
It’s not just failed businesses that are a concern. A director’s past behaviour can be a major indicator of future risk. Red flags can include:
Any of these issues could make you vulnerable later down the line. Worse still, if the director has a fraudulent history, the risk isn’t just financial, but reputational. Customers want to work with businesses they trust and who you partner with directly reflects on your values.
Since November 2025, Companies House has made it mandatory for anyone who sets up, runs, or owns a UK business to verify their identity. Prior to this, anyone could register for a business without any identity checks, resulting in duplicate records which made it harder to do due diligence.
Checking the identity of a director can be performed as part of your wider credit checks with Creditsafe’s Verify, which gives you access to complete directors' histories including current roles, past appointments, resignation dates, and the companies they’ve been involved with.
The director of a business isn’t the only one who poses risk. Often, it’s baked into the business itself.
SMEs are under pressure from multiple angles. Slow economic growth, high energy costs, growing numbers of cyberattacks, and the rise of fraud powered by generative AI to name a few. For example, research by PWC found that 81% of UK businesses expect to raise prices due to high energy costs. Running a credit check is the best way to find out if they are sinking or swimming in the current climate.
However, it’s not just about deciding whether you should work with someone. You can use these checks to decide how you work with them.
For businesses with weaker credit histories, you might want to request payment upfront, or limit order quantities.
For companies with strong credit history, you could offer more favourable terms to strengthen the relationship.
In the UK, businesses benefit from a strong credit information ecosystem. Under the Commercial Credit Data Sharing (CCDS) scheme, banks are required to share finance agreement data with credit reference agencies such as Creditsafe. This includes overdraft limits, loan balances, and repayment history for businesses with an annual turnover of up to £25 million.
The result? You can access a complete financial picture easily once you partner with the right credit reporting agency. With Creditsafe, you have access to finance agreement data for 4.03M Limited Companies and 2.17M Unincorporated Companies.
Even a business with a spotless credit history can be a risk to your business if the people behind it aren’t who you expect.
For example, you’ve found a supplier offering exactly what you need at a competitive price. Their credit report also checks out. However, you discover that one of the beneficial owners appears on a sanctions list – but you’ve already started doing business with them.
Suddenly, you’re implicated.
If regulators determine you failed to act on “reasonable cause to suspect”, at best you can expect a hefty fine, or at worst, criminal prosecution.
Over 60% of UK businesses have experienced fraud, corruption or other financial related crime in the past two years. That’s why Know your Customer (KYC) and Anti-Money Laundering (AML) checks aren’t just a tick-box exercise. They offer a deeper insight into who exactly you’re working with, helping you to avoid fraud before it happens.
While AML checks are mandatory for many UK businesses, they should also be seen as a way to put yourself at a competitive advantage.
Why use Creditsafe for your KYC and AML checks?
We screen against global PEPs and Sanction databases as standard
We offer more bank information than any other UK provider
We can give you an answer in seconds, reducing drop off rates
KYC Protect is our end-to-end solution that centralises all your core KYC and AML obligations, helping you to identify, screen and monitor your commercial relationships. It covers 1.6m PEP records, 100% of global sanctions and enforcement lists, 200+ countries & territories, with 5.3 million profiles in our database.
Once you’ve chosen a partner and before any money is exchanged, there’s one last step: verifying bank account details.
Using a bank verification tool allows you to confirm the details of an account in real-time, reducing the risk of misdirected payments or fraud. It’s a simple and quick check, but it’s one that can avoid very costly mistakes. If the details you have aren’t correct, you’ll know before any money exchanges hands.
You can’t rely on word of mouth or reputation alone. A credit report should be central to your risk assessment, no matter the relationship with the business. With Creditsafe, you’ll be making informed decisions that give you confidence in the businesses you partner with.
You can perform all of these checks, and more, with Creditsafe. Get in touch with our expert team to discover how you can use our tools to protect and grow your business.