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How to build business credit:

  1. Keep your information current with all three credit bureaus

  2. Establish trade lines with your suppliers

  3. Make payments to creditors on time or early

  4. Borrow from lenders that report to credit bureaus

  5. Keep your public records clean

Here are five steps to build your business credit:

1. Keep your information current with all three credit bureaus

There are several credit bureaus that collect data and create business credit scores, including Dun & Bradstreet, Experian and Equifax. But compared with personal credit scores, which follow the standards set by Fair Isaac Corp. to produce a standard FICO score, business credit scores are much less streamlined. Each business credit bureau has a different formula for calculating scores, and different lenders report different types of data, says Gavin Harding, a senior business consultant at Experian. Since you never know which credit bureau your vendors, creditors or potential customers will check, it’s smart to maintain all three. Dun & Bradstreet, for example, allows business owners to update basic business information (such as years in operation or number of employees) and upload financial statements. The more complete your profile, the better, Colley says. For more on how to monitor your score, check out our business credit score guide.

2. Establish trade lines with your suppliers

If you buy supplies, ingredients or other materials from third-party vendors, those purchases could help build your business credit. Many suppliers extend trade credit, which means they allow you to pay several days or weeks after you receive the inventory. If you have this type of accounts-payable relationship, ask your supplier to report your payments to a business credit bureau. Your business credit score will get a boost as long as you stick to the terms of the trade agreement.

You need at least three trade lines to get a Dun & Bradstreet Paydex score, which measures past payment history. Even if you don’t work with a lot of suppliers, Colley suggests setting up trade lines with any small vendor, such as your water or office supplies distributor. If those vendors don’t report to a credit bureau, you can list them as a trade reference on your account, and Dun & Bradstreet will follow up to collect your trade data, Colley says.

3. Make payments to creditors on time or early

Although each credit bureau uses slightly different methods of crunching business credit scores, all of them consider your history of paying creditors. To ensure a good score, make sure your payments are on time or, even better, early. Dun & Bradstreet only assigns perfect scores to those who pay early. A long credit history tends to weigh favorably, so the sooner you can start establishing business credit, the better. Also, credit utilization is a factor in business credit scores — as it is with personal credit scores. So use your cards and lines of credit, but don’t max them out. Limit your spending to 20% to 30% of your credit limit.

4. Borrow from lenders that report to credit bureaus

Small-business loans can actually boost your business credit if you make all your payments on time and the lender reports to a business credit bureau. But not all lenders do. So if you’re intent on building business credit, ask the lender whether they report before you take out a small-business loan.

Banks typically report to credit bureaus, but if you have bad credit, you probably won’t qualify for a bank loan. Many online small-business lenders — which are more willing to lend to bad-credit borrowers — also report, including OnDeck, Lending Club, Funding Circle, Fundation, Kabbage and BlueVine. However, lenders including SmartBiz, Lighter Capital, Fundbox and merchant cash advance companies don’t report.

5. Keep your public records clean

In addition to detailing your business’s history of paying creditors, your business credit report will have any public records filed in your business’s name, including bankruptcies, judgments and liens. A judgment is a court ruling; if the ruling is against you in a debt collection lawsuit, it will have a negative affect on your credit score. A lien is a creditor’s legal right to seize your property unless you pay an owed amount, such as an outstanding small-business loan or unpaid taxes.

These negative marks on your business credit report can haunt you. Bankruptcies, for example, stay on your Experian credit score for almost 10 years; tax liens, judgments and collections remain for almost seven years.