You may be wondering, “Just how much could there be to learn about business credit?” After all, you already have a lifetime of experience with building your personal credit, so you consider yourself to be somewhat of an expert when it comes to credit of any kind. And in many respects, you are an expert.

If you are like most of us, your credit history is diverse with loans ranging from student loans to car loans to mortgages, and of course there are the credit cards. We all have them. And we all know what happens when we don’t pay our bills or if we consistently pay our bills late. The consequences can be as drastic as foreclosure or repossession. And at the very least, poor personal credit translates to higher interest rates which means more out of pocket money.

So you’re probably thinking that credit is credit, and you build business credit much the same way as your personal credit. In part, you are right. But there are some notable differences. Foremost is the way that we build our personal credit gradually over several years, and maybe even make a few mistakes along the way. But when it comes to business credit, more than likely, we need to establish our credit relatively quickly so that our business can grow and flourish and we cannot afford to make mistakes that could permanently affect our business credit rating.

Still, building business credit does take time. Think of it like building a house. You must first lay the foundation, and then gradually add the frame, rafters and so forth until it is time to put on the finishing touches and decorate. Similarly, when it comes to business credit, you must first establish a solid foundation with five or six vendors who will serve as trade references. Your credit limits for these initial vendors is usually relatively low, just a few hundred dollars. Once these are firmly established, you add others whose credit limits are somewhat higher, say a couple of thousand dollars. And you keep building until you have reached the level of credit you need. If you do it right, the sky is the limit.