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Does a business credit card affect your personal credit?
The answer: Yes, in certain cases — and depending on your provider.
- When you apply for a card.
An issuer will typically still run a hard inquiry on your personal credit that will usually lower your personal credit score temporarily.
- If you default on your debt.
Most business cards require a personal guarantee when you apply. This agreement permits the card’s provider to pursue payments from your personal accounts if your company isn’t able to meet its obligations. Your personal credit may take a big hit if you’re unable to repay your debt. If you want to avoid this risk, consider a business credit card without a personal guarantee.
- When your issuer reports account activity to consumer credit bureaus.
Some issuers will report account activity to consumer bureaus in all cases. This means carrying high balances on your card can affect your personal credit. Other companies will report to consumer bureaus only if you fail to make card payments.
If this is an important point for you, check what an issuer’s policy is before applying.
Which business credit cards do not report personal credit?
Most business card issuers won’t report your payment activity or will report certain infractions only. However, some issuers will report all payment activity to consumer bureaus.
Keep in mind that because most issuers require a personal guarantee, they will check your personal credit when you apply for a business credit card.
|Bank or issuer||Reports business cards to personal bureaus||Credit check with personal credit bureaus?|
|American Express||Yes, but only delinquencies||Yes|
|Bank of America||No||Yes|
|Barclays||May report according to Barclays’ discretion||Yes|
|Chase||Yes, but only delinquencies of 60 days or more||Yes|
|PNC Bank||No||Yes; potential soft pull|
|Synchrony Bank||Yes, but only delinquencies||Yes|
|U.S. Bank||Yes, but only delinquencies of 60 days or more||Yes|
|Wells Fargo||Yes, but only when in default||Yes|
Can I get a business credit card that won’t report to my personal credit?
Yes. You’ll find business credit cards whose issuers won’t report your payment activity to consumer credit bureaus. Other issuers will report payment activity only in certain instances, such as if your payments are very late.
When you submit a business card application, the issuer may check your personal credit. The issuer will also likely require a personal guarantee for your debt, allowing it to go after your personal assets if you fail to pay off your business card balance.
Which business credit cards minimally affect a personal credit score?
|Business card||How it reports||Learn more|
|Brex for Startups||Brex for Startups has no personal liability, meaning your personal credit score won’t be affected.||Read review|
|Ink Business Cash℠ Credit Card||Chase typically reports to personal credit bureaus if your payments are late by 60 days or more.||Read review|
|Bank of America® Business Advantage Cash Rewards Mastercard® credit card||BofA doesn’t report activity to personal credit bureaus.||Read review|
|CitiBusiness® / AAdvantage® Platinum Select® Mastercard®||Citi business card activity doesn’t show up on personal records.||Read review|
|Wells Fargo Business Platinum Credit Card||Wells Fargo reports to personal credit bureaus if your card is in default — typically 180 days overdue.||Read review|
|U.S. Bank Business Select Rewards||U.S. Bank does not report to personal credit bureaus unless your payments are late by 60 days or more.||Read review|
Our pick for a card that won't affect your personal credit
Brex for StartupsRead more
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3 tips to protect your personal credit score from a business credit card
Healthy credit comes with monitoring your finances — ever important when you’re running a business. Even if your business card provider reports to the commercial bureaus, work to protect your personal credit with these pointers:
- Pay on time.
Many issuers report delinquencies or negative info to the personal bureaus, even if those payments are for business purchases.
- Stay under your limit.
Spending conservatively and even paying your bill in full can keep your credit utilization low, making it easier to qualify for other credit cards or business loans, should you need them.
- Keep your business spending separate.
Draw a line between your personal and business finances and build a stronger business credit score by using your card for business expenses only.
Do I need a business card that won’t affect my personal credit?
If you’re worried about potential hiccups with your business credit card, you can look into cards that won’t report to the personal credit bureaus. But serious delinquencies — late payments of 60 days or more, defaulting on your account or reports to collections — may end up on your personal credit history regardless.
If you’re confident in your business’s financial health, instead focus on weighing cards that can best benefit and maximize your business spending, whether with a low interest rate, a balance transfer promotion or tiered rewards.
Should I be worried about affecting my personal credit?
The short answer is: it depends. Learn the mechanics of how your business card activity might affect your personal credit. For example, it’s likely that your personal credit will be impacted slightly when you apply for a business credit card.
You’ll also want to know your provider’s policies on payment history reporting. The good news is most of the time, your business card activity won’t affect your personal credit. But this might not be the case in certain situations — for example, if you default on your debt. Also, certain issuers will report your payment activity to consumer bureaus in all instances.
If your issuer does report to consumer bureaus, watch your balance on your business credit card as your credit utilization will affect your credit score.
For most business owners, the need for a business credit card can be a sign that you’ve made it — your company is robust enough to need separating from your personal spending, and you can take advantage of rewards designed for your spending habits.
Still, your business activity could negatively affect your personal credit score without knowing the terms you’ve agreed to. Minimize any risk to your personal credit by managing your business spending carefully.
To find a card to best suit your unique business needs, read our comprehensive guide to business cards.
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