Business credit cards with no credit check?

Sorry: you’re not going to get a business credit card without a credit check in the UK. However, even if you have bad credit history or none at all, you still have plenty of options.

If you’re starting a new business and you have no business credit history, or if your business has a dodgy credit score due to missed payments in the past, it’s understandable that you might wonder if any providers offer business credit cards with no credit check.

The answer is no. Credit card providers are obliged to make sure they lend responsibly, so your credit report will be assessed. There’s no getting around it.

Fortunately we’ve uncovered the secrets to giving yourself the best chance of being approved for a business credit card, even if your credit rating is poor. Take a look at your options and then you can spend less time worrying about your credit score and more time doing what you do best: running a successful business.

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 like your bank statements. They do this both to decide whether to lend to you at all, and to determine the terms of the credit you’ll be offered. That means things like your credit limit, interest rate and any interest-free periods. The better your credit scores, the better the deal you’re likely to be offered.

However, in some cases they will also check the business owner’s personal credit score. 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.

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, you can also check your eligibility for the following types of business credit cards for which you’re more likely to be approved, even with a bad credit score.

  • Credit cards with a personal guarantee. This allows the lender to seek funds from your personal accounts if your business falls behind on repayments, providing extra protection for the lender so they feel more comfortable approving your business credit card application. The major disadvantage is the personal risk you’re taking on. If your business is ever unable to repay its debt, you might compromise your savings, or even end up with a personal bankruptcy on your credit report for six years.
  • Secured business credit cards. With this type of card, you 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 US, 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. You may prefer to build your credit score instead of applying for one of these. Read our guide to business credit scores for tips on how to build business credit history.

Eligibility checks vs full application

Many business credit card providers offer an eligibility checker tool on their website. These require you to 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. This 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. This 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 assessing the likelihood of being approved for a credit card before you make a full application, you can reduce the chances of damaging your credit score by being declined several times.

Dos and don’ts

Do

  • Consider applying for a secured credit card or one with a personal guarantee.
  • Use an eligibility checker before making a full application.
  • Take steps to improve your business and personal credit scores.

Don’t

  • Apply for a credit card if an eligibility checker declines you.
  • Make several applications in a short space of time. This can damage your credit score further.
  • Spend more than you can afford to repay.

What if I’m turned down for a business credit card because of my credit score?

You still have a few options available to you at this point. The best one for you depends on the reason you wanted a business credit card in the first place.

  • Do you need the flexibility to manage your cash flow when you’re waiting for invoices to be paid? If so, and if your personal credit score is better than that of your business, you could consider using a personal card for business spending – with caution. Check the terms of your card to make sure it doesn’t prohibit business use; track your spending carefully to make sure you can separate personal and business transactions for bookkeeping purposes; and remember you’ll be personally liable for any debts you incur.
  • Do you need to provide cards for your employees to use when they’re making transactions on behalf of the business? If that’s the case, you could consider a prepaid card.
  • Do you need to spread the cost of a large purchase for the business? You have plenty of other options for business finance in that case.
  • Do you want to earn and spend rewards? You could use a personal reward credit card. However, you might be better off concentrating on improving your business credit score. This will help you get a reward card tailored to your business in the future. Concentrate on paying all your other bills on time and then maybe try again in 12 months.
  • Frequently asked questions

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