Can a business credit card affect my personal credit?

Discover how a business credit card could affect your personal credit score.

Updated

Oct 13, 2023

Fact checked

Business credit cards provide a flexible line of credit that you can draw on as needed to boost business cash flow or pay unexpected bills. But while using a business credit card can help you build a business credit score, there are times when it might impact on your personal credit score, too.

When could a business credit card affect my personal credit score?

Applying for a business credit card. When you apply for a business credit card, a lender will always assess your business credit report. However, if your business is just starting out and doesn’t have much of a trading or credit history, the lender will likely look at your personal credit report as well. This helps the provider determine your creditworthiness and whether it’s happy to let you borrow. When a hard search is carried out on your personal credit report, you’ll notice a slight dip in your credit score, but this is usually only temporary.
If you’re a sole trader. As a sole trader, you and the business are considered one legal entity, which means you’re personally liable for your business debts – including if you have a business credit card. This means your personal credit score will be impacted, depending on how you manage your credit card. If you can’t keep up with repayments, your personal credit score will suffer. This is also the case for partnerships if all partners are responsible for the company’s debt.
If you have a personal guarantee and default on your debt. Most business credit cards require a personal guarantee when you apply. This means that should your business default on the repayments or become insolvent, you will be personally liable for paying back the debt. If the lender calls on you to repay the debt from your personal accounts, this will harm your personal credit score.

How can I protect my personal and business credit scores?

The following behaviours will help ensure you maintain a healthy business and personal credit score.

Pay your bills on time. If you pay your credit card bill on time, you won’t have to worry about lenders retrieving debts from your personal accounts or having late payments reported to the major credit reference agencies (CRAs). Consumer CRAs include TransUnion, Equifax and Experian, while the major business CRAs are Experian, Equifax, CreditSafe and Dun & Bradstreet.
Stay under your credit limit. When you keep your credit utilisation low, it’s easier to qualify for other credit cards or business loans in the future. Exceeding your credit limit can also damage your credit score.
Use your business credit card for business purchases only. This makes it easier to manage your finances and helps draw a line between your personal and business credit scores.

Can I get a business credit card that won’t affect my personal credit?

This depends on your situation. If you’re a sole trader, any type of debt you take on can affect your personal credit rating. If you’re a limited company (which means it’s a separate entity to you legally and financially), you might be able to find a credit card provider that doesn’t require you to sign a personal guarantee, but they’re not terribly common.

The key is making sure you use your business credit card carefully and ensure you make your repayments in full and on time. Remember that if you’re the primary card holder, you’ll be liable for repaying your business credit card debt even if the card you’ve applied for doesn’t affect your personal credit rating.

Dos and don’ts

Do

Choose the best business credit card for your needs based on rates, terms and credit limits
Spend within your means
Regularly check both your business credit report and your personal credit report and get any errors corrected

Don’t

Exceed your credit limit
Use your business credit card for personal purchases
Fall behind on credit card repayments

Frequently asked questions

Business credit cards are designed specifically for work spending, which is why lenders assess your business credit score first.
Unlike personal credit cards, business credit cards often include features such as additional cards for employees, customisable spending limits for different users and expense tracking. They also tend to offer higher credit limits.
However, business credit cards don’t usually offer interest-free spending as many personal credit cards do. Purchases made on a business credit card won’t be covered by section 75 either, as they are with a personal credit card. This means you could find it harder to get your money back if something goes wrong.

Read about how different factors can affect your score

Debt consolidation

Gambling

Individual voluntary agreement (IVA)

Loan applications

Utility bills

We show offers we can track - that's not every product on the market...yet. Unless we've said otherwise, products are in no particular order. The terms "best", "top", "cheap" (and variations of these) aren't ratings, though we always explain what's great about a product when we highlight it. This is subject to our terms of use. When you make major financial decisions, consider getting independent financial advice. Always consider your own circumstances when you compare products so you get what's right for you. Most of the data in Finder's comparison tables has the source: Moneyfacts Group PLC. In other cases, Finder has sourced data directly from providers.

Thank you for your feedback!

Rachel Wait

Rachel Wait is a freelance journalist and has been writing about personal finance for more than a decade, covering everything from insurance to mortgages. She has written for a range of personal finance websites and national newspapers, including The Observer, The Mail on Sunday, The Sun and the Evening Standard. Rachel is a keen baker in her spare time.

Business credit cards with no credit check? Compare the best Avios business credit cards

More guides on Finder

5 underrated holiday hotspots and how to fly there on your business spending
Here’s how your business spending can add up to flights to some fabulous hotspots in 2024, with a BA Amex Accelerating Business Card. (Paid content)
Juni Business Card review
Financial platform Juni has launched its first virtual business credit card (technically a charge card) in the UK with up to 1% cashback on all your eligible spend and custom credit limits.
Capital on Tap Business Credit Card review
Earn Avios or cashback on all your business spending with this business Visa from challenger Capital on Tap.
Allstar Plus ‘All-in-one’ Business Fuel Card review
The Allstar Plus card is a combined business fuel card that promises to reduce your business admin and improve cash flow.
How to use a business credit card to manage cash flow
Learn how to make the most of your business credit card with our expert tips on how to use it to improve your company’s cash flow.
Compare the best Avios business credit cards
Have a look at these business credit cards that let you earn Avios points on all your expenses, no matter whether you’re paying for a flight or buying drinks to celebrate your team’s latest accomplishment.
HSBC Business Credit Card review 2024
With its competitive interest-free period and purchases rate, this credit card can give your business’ finances the breathing space they need.
Bank of Scotland Business Credit Card review
With a decent interest rate on purchases and a nice interest-free period, this card can help you manage your business’s irregular cash flow.
Santander Business Cashback Credit Card review
Designed for small and medium businesses looking for payment flexibility, this card goes the extra mile with an attractive 1% cashback on all purchases.
Lloyds Bank Business Credit Card review
Reserved for Lloyds Business customers, this straightforward credit card comes with a competitive interest rate that can help you improve your cash flow.