Do UCC Filings Affect Your Credit? What You Need to Know

Introduction

If you’ve ever taken out a business loan or financing, you may have heard of UCC filings. A Uniform Commercial Code (UCC) filing is a legal notice that a lender has a security interest in a borrower's business assets. While these filings are common in commercial lending, many business owners worry about their impact on credit scores.

So, do UCC filings affect your credit? The short answer: they don’t directly impact your credit score, but they can influence your ability to obtain financing. In this article, we’ll break down what UCC filings are, how they appear on business credit reports, and what you can do to manage or remove them.

What Is a UCC Filing?

A UCC filing, specifically a UCC-1 financing statement, is a document that a lender files with the Secretary of State’s office to secure an interest in a borrower's assets. This gives the lender a legal claim to those assets if the borrower defaults on their loan.

There are two main types of UCC filings:

• Specific collateral UCC filing – Covers only specific assets, such as equipment, inventory, or accounts receivable.

• Blanket UCC filing – Covers all business assets, making it more restrictive for borrowers to obtain additional financing.

Lenders use these filings to protect their investment and ensure they have priority over other creditors if a borrower cannot repay their loan. But how do these filings show up on credit reports? Let’s take a look.

How UCC Filings Show Up in Public Records and Credit Reports

UCC filings are public records, which means anyone—including potential lenders—can check them. However, they do not appear on personal credit reports from agencies like Experian, Equifax, or TransUnion.

Instead, UCC filings are often reported by business credit bureaus, such as:

• Dun & Bradstreet (D&B)

• Experian Business

• Equifax Business

These filings can be included in a business credit report, which means that banks and alternative lenders may review them when considering a new loan application. If your business has multiple UCC filings, it could raise red flags for lenders—even if your credit score is strong.

Do UCC Filings Affect Your Business or Personal Credit Score?

A UCC filing itself does not lower your business or personal credit score, but it can impact your ability to secure additional funding. Here’s how:

• Lender perception: Multiple UCC filings signal that your assets are already pledged as collateral, which may make new lenders hesitant to offer credit.

• Debt-to-income concerns: Even if UCC filings don’t impact your credit score, lenders may still factor them into their risk assessment.

• Loan stacking issues: If you have existing UCC-1 filings, some lenders may be unwilling to provide new financing unless previous UCC claims are removed or subordinated.

In short, UCC filings don’t hurt your credit score directly, but they can impact your borrowing power.

How to Check If You Have a UCC Filing Against You

Since UCC filings are public records, checking whether one exists against your business is easy. Here’s how:

1. Search your state’s Secretary of State website – Most states offer an online UCC search tool.

2. Check business credit reports – Dun & Bradstreet, Experian Business, and Equifax Business may list UCC filings.

3. Request records from lenders – If you suspect a lender has placed a UCC filing on your assets, ask them directly for confirmation.

Regularly reviewing your UCC filings ensures that outdated or incorrect filings don’t create unnecessary barriers when applying for credit.

How to Remove or Manage UCC Filings

If you’ve paid off a loan but still see an active UCC-1 financing statement, you may need to take action to remove it. Here’s how:

1. Request a UCC-3 termination statement – Lenders are required to file a UCC-3 form to terminate a UCC filing once a loan is repaid. However, some lenders don’t do this automatically, so you may need to request it.

2. File a UCC-3 yourself – If a lender is unresponsive, you can file a UCC-3 termination request with the Secretary of State.

3. Monitor business credit reports – After a UCC is removed, check your business credit report to ensure the filing is no longer reported.

Additionally, if you need new financing but have an active UCC, you can negotiate with lenders to subordinate or remove old UCC filings.

Conclusion

UCC filings do not directly impact your credit score, but they can affect your ability to secure financing. Since they are public records and appear in business credit reports, lenders may view multiple UCC filings as a sign of higher financial risk.

To protect your borrowing power, regularly check your UCC filings, ensure that outdated filings are removed, and communicate with lenders about properly terminating UCC-1 statements after a loan is paid off. By staying proactive, you can maintain a clean financial profile and improve your business’s access to funding.

If you’re unsure about your UCC status, consider running a UCC search today to avoid surprises when applying for future financing.

~Written by: @AskForCorey