Business credit cards with no credit check?

It’s understandable that you might want to get hold of a business credit card without a credit check.

However, credit card providers are obliged to ensure they lend responsibly, so there’s no getting around the fact that your credit report will be assessed.

Nevertheless, there are plenty of steps you can take to improve your chances of being approved for a business credit card, even if your credit rating is poor.

How do lenders assess business credit card applicants?

When you apply for a business credit card, lenders will always assess your business credit score, as well as financial documentation, including your bank statements.

However, in some cases, your personal credit score will also be checked. This is common when your business is new and doesn’t have much trading history to assess.

To improve your chances of being approved for a business credit card, you’ll want to take steps to improve both credit scores by ensuring all personal and business debt payments are made on time.

The credit limit, interest rate and interest-free period offered to you are also likely to be determined by your business and personal credit scores. The better your credit scores, the better the deal you’re likely to be offered.

How to improve your chances of being approved for a business credit card

The best thing you can do is take steps to improve your credit score. However, there are certain types of credit cards that you’ll be more likely to be approved for, regardless of your credit score.

• Credit cards with a personal guarantee. A personal guarantee is a contract that allows the lender to seek funds from your personal accounts if your business falls behind on loan repayments. This contract provides extra protection for the lender, which helps them feel more comfortable approving your business credit card application. The major disadvantage is the added personal risk you’re taking on. If your business falls on hard times and is unable to repay its credit card debt, you might compromise your savings or even end up with a personal bankruptcy that stays on your credit report for up to seven years.
• Secured business credit cards. With secured business credit cards, you’ll pay a deposit which is held by the card issuer until you return the card. This is another form of protection that can help lenders feel more comfortable approving your application. However, although this form of credit card is popular in the United States, it’s quite rare in the UK.
• Bad credit business credit cards. There is a specific market of business credit cards aimed at companies with poor credit scores. However, these cards tend to have huge interest rates, low credit limits and strict terms, so you may prefer to build your credit score instead of applying for one of these.

Eligibility checks vs full application

Many business credit card providers offer an eligibility checker tool on their website. With this, you’ll fill in a few financial details to see whether you’re likely to be accepted for a specific credit card.

The most useful thing about these tools is that they only run a “soft check” of your credit report, which doesn’t affect your credit score at all. A “hard check” of your credit report produces a temporary dip in your credit score.

If you’re approved by an eligibility checker, you’ll still have to make a full application, which will include a “hard check” of your credit report. It’ll also require more information, and you could still be declined based on these additional details.

Still, by discovering the likelihood of being approved for a credit card before you make a full application, you can reduce the chances of decimating your credit score by being declined several times.

Dos and don’ts

Frequently asked questions

• What are the key differences between business credit cards and personal credit cards?

  Business credit cards are designed specifically for work spending, which is why lenders will assess your business credit score first.

  They often include features such as additional cards for employees, customisable spending limits for different users and expense tracking.

  The business will be liable for any debts incurred, not the user (unless a personal guarantee has been signed).

• How do I apply for a business credit card?

  Most business credit card providers allow you to make applications online or over the phone. You’ll need to provide identification, proof of ownership and financial details for you and your business.

• How do I find the best business credit card?

  This will depend on your personal desires and circumstances. Many applicants like to consider the credit limit, interest rate and introductory bonuses. Our guide on business credit cards can help you find the best business credit card for your needs.