How long does it take to build business credit?

It can take around 3 years or more to build business credit according to some financial experts. While this is common to hear, other experts claim it is misleading and that you can build business credit in just one year.

Here are some ways to speed up the process of building business credit:

Your business name matters

To some, this may seem like a minor detail, but your business name really can affect how long it will take to build your business' credit. This holds particularly true when you include the name of a risky industry in your business name.

A risky industry typically consists of one that involves more cash transactions than most standard businesses or one that has a high risk of injuries for employees or customers.

Gambling is an example of a risky industry in terms of cash transactions, while construction is an example of a risky industry in terms of hazardous work.

A way to speed up the process of building business credit in these two industries is to not include the words gambling or construction in their company names.

The phone number of your business

Your business phone number is going to be on many official things related to your business, like its website, business cards, and any advertisements. Under no circumstances should you use a cell phone number or residential number when listing your business' phone number.

If you use a cell phone or residential number it could lead to your business being flagged as not being a real establishment. A separate phone number specifically for your business is essential.

And be sure to make your phone number easy to find as not only customers and vendors will be looking for it, but also lenders as well.

Obtain an official business address

Much like your business phone number, your business address is going to be all over items referencing your business, such as your website, business cards, and any marketing materials.

Also similar to your business phone number, if you use a residential address, your business is likely to be flagged as unestablished. The same thing can also happen if you use a UPS box or PO box.

The solution to this is establishing a brick-and-mortar address for your business. Oftentimes credit providers and lenders will see if they can find a visual confirmation of your business on google maps. If they see it is a residential building instead of a commercial space, you may get denied.

Here are some companies that provide virtual office spaces:

• Regus

• Alliance Virtual Offices

• Da Vinci

Make sure your business website is in order

Lenders and credit providers will almost always look at your business website. Your business website is crucial in giving them a good impression of your business, so don't spare the expense here.

And your business website is obviously not just for credit providers and lenders, but also for your consumer base and other vendors. Great websites are known to generate higher sales, even if your business does not sell their goods or services online.

Business email address

Your business email address should be on a domain you have bought. Do not use Gmail, Yahoo, AOL, or any other common personal emails. This gives your business a professional quality and it won't feel to others that you are a hobbyist or just starting out.

Get a bank account dedicated to your business

Having a business bank account is essential. You should not be mixing your own personal banking accounts with your business accounts. First of all, it makes tax time more complex and difficult. Second, many lenders and credit providers require you to have a business bank account.

Get a record of timely payment experiences

Your credit history is one of the prime factors in determining if your business is credit-worthy. If you make timely payments, lenders and credit providers see your business as low risk and are that much apt to give you a loan or line of credit.

When opening a credit account for your business, try to only use vendors that report to the business credit reporting agencies.