How to Build a Solid Business Credit History

With a long history in global finance and banking, Julio M. Herrera Velutini is the chairman of an international bank based in Puerto Rico. Focused on helping businesses succeed, Julio Herrera Velutini provides credit to small and medium-sized businesses in Latin America and the United States.

Businesses can benefit immensely from debt. Here’s how to build a positive business credit history that will help you borrow money some time in the future:

Start early

The sooner you start building business credit, the better. Apply for credit, even if you don’t need it, and cultivate a culture of paying on time or early. Never max out your credit, and ideally keep any debt below 30 percent of your credit limit. Whenever you’re eligible to raise your credit limit, do so. The idea here is to build a consistent credit history that’s attractive to lenders. Some time later, you may just need a sizeable loan to expand your business and you’ll have a great credit history on your side.

Establish trade lines with suppliers

If you receive materials from suppliers or third parties through trade accounts, your payments can build your business credit. Request your supplier to avail details of your trade payments to a credit reference bureau. Do this only if you are on time with your payments. You could even create trade lines with small vendors such as office supplies distributors. Even if these vendors do not report to credit bureaus, you can include them as references on your business credit account to bolster your status as a reliable borrower.