How to Easily Build Your Ecommerce Startup’s Credit Rating?

Good Credit can easily be the lifeline for any business, especially newly founded eCommerce startup businesses, as it helps you obtain funding to manage your brand expansion, research and development, upkeep and maintenance expense and staffing needs.

In fact, it remains the one of the main contributing factors to the future growth of your eCommerce startup. With good business credit, you will be able to respond quickly, especially in terms of time sensitive requirements without compromising on the reputation of your brand or without having to halt your operations.

Business credit has become the most prominent vehicle to get business loans, determine insurance premiums and to even set lease payments. With good business credit, you are sure to enjoy lower rates and strengthened cash flow for your eCommerce startup business.

How Are Credit Scores Calculated?

It is utterly easy to calculate your eCommerce startup’s credit score. Your startup business’s credit score ranges from 0 to 100%. These scores are determined based upon various factors. Some of the prominent factors include:

  • Outstanding Balances – Any outstanding balances that your eCommerce startup business owes to partners, investors, vendors or other stakeholders.
  • Credit Utilization – How does your eCommerce startup business utilizes the credit that it enjoys from its vendors, affiliates, partners or other stakeholders.
  • Total Experience – What is the total experience of your team in your niche and industry?
  • Payment Habits – What’s the typical payment procedure, duration and frequency of your eCommerce startup business?
  • Demographics – What is the location of your startup business? What is the level of competition in the area and how does your startup faring in the competition? Who are your buyers and where are they based?
  • Public Record – Frequency and dollar amounts associated with liens, judgments or bankruptcies.
  • Standard Industrial Classification Code – Verification of the four digit industry classification code assigned to your startup business.
  • Business Size – Overall size of your startup business and its failure score.

Tips for Improving Business Credit:

Business credit scores plays a vital role in helping suppliers, lenders and other creditors to determine whether or not a business can make all its payments on time.

Here are some effectual tips for building your eCommerce startup business’s credit.

  1. Always Make Payments On Time:

One of the most important things that you can do for building your credit score is to make all your payments on time. Even though making payments late by one or two days won’t be reported as late payment, it is good to pay all dues before the date. This not only helps you increase credit score, but also prevents you from paying late fees.

  1. Maintain Low Debt Level:

At certain point, you may require to take a loan to cover unexpected expenses. However, you should keep those revolving debts as low as possible. This will definitely help you in maintaining low utilization of credit, which in turn increases your business credit score.

  1. Check Your Credit Report Frequently:

Similar to personal credit report, even businesses have credit reports and there are chances that these report aren’t 100% accurate. You can get credit report from any of the reporting agencies to identify whether any incorrect information has been included. You can also get business credit services from reputed agencies.

  1. Source Great Business Graphic Designs

Procuring well designed graphic designs such as business logo designs are very important as graphic designs play a vital role in providing a unique identity and USP to your startup company. Of course, you should hire the best graphic designer or freelancer to get your graphical elements. Or better yet, follow some easy DIY logo design tips and create an amazing logo design for your startup business. After all, who knows your startup brand better than you? Remember, great graphical elements will not only help you promote your business, but will also help you build your business’s credibility in the ever-so-competitive and ever-so-chaotic market.

Importance of Having Good Credit Score:

E commerce business owners may coast by with their individual credit score; but it is extremely important to build up their startup business’s credit score and maintain their personal credit scores, separately.

Here are some tips that can go a long way in helping startup business owners:

  1. Get Larger Business Loans:

When your business has good credit score, getting big business loans are much easier. Even though your personal credit score gets you approved for small loans, you need big loans in order to keep your business functioning properly. Hence, getting bigger loans will become hassle free if you have good business credit score.

  1. Good Terms And Rates:

With high business credit scores, you can enjoy the best terms and rates on every loan you’ll obtain. Most of the lenders come forward to provide loans for businesses with good credit score at the lowest possible rates and terms.

Over to You!

We are sure now you understand how important it is to build a good credit for your eCommerce startup and how you do it effectively. But before you jump guns and get into action, you must first seek out efficient trade partners can help you build better credit by reporting your trade experiences to the business credit bureaus such as Experian and Dun & Bradstreet.

Remember, working with suppliers, vendors, affiliates and partners who can help you by reporting your timely payments to score issuers will help you bring about a positive impact on your startup business’s credit rating. And once a good credit is built for your eCommerce startup business, you will not have problems securing business loans and credit in the times of come.

I hope you enjoyed tips on how to boost your company’s credit score. So what do you think of these easy-to-follow tips? Or maybe you have a question.

Either way, let me know by leaving a quick comment below right now.

5 thoughts on “How to Easily Build Your Ecommerce Startup’s Credit Rating?

  • October 21, 2017 at 1:49 pm

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  • September 29, 2017 at 2:28 am

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  • August 24, 2017 at 3:38 am

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  • August 18, 2017 at 1:25 pm

    Great article. Thanks for these tips. I can now improve my ecommerce. I have read an article that Shopify and Woocommerce are great tools? Do you agree?


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