Do business credit cards affect personal credit?

Do business credit cards affect personal credit

When you apply for a business credit card, lenders will consider both your business’s credit history and your personal credit history. On top of this, some business credit cards report to consumer credit bureaus. 

This means business credit cards can impact your personal credit. Keep reading to learn more about the top factors you’ll need to be aware of in order to understand the relationship between business credit vs personal credit. 

What is business credit?

Business credit functions similarly to personal credit, except that it’s specific to your enterprise. It starts with opening up a line of credit and takes time to build. 

Your business will need to take out debt and repay it in a timely manner in order to build up your business credit score. Lenders will look into your business credit score every time you apply for financing. It can greatly impact your chances for funding and the interest rates you’ll receive, so it’s important that your business credit is in good shape. 

Business credit vs personal credit

Both business credit and personal credit give lenders information about how trustworthy you are as a borrower. Credit scores can affect your chances for securing financing, as well as the interest rate you’ll receive on loans. 

The most fundamental difference between the two is that your personal credit is tied to you, while your business credit is linked to your company. Your personal credit is binded by your Social Security number, while your business credit is linked by your Employer Identification Number (EIN) or Tax ID Number. 

Your personal credit will influence your ability to get a mortgage, car loan, and other types of financing. While your business credit score will have the most noticeable impact on your company’s opportunities for financing. 

How business credit cards can affect personal credit 

Although your personal credit score exists separately from your business credit, there are times when the two can overlap. This is especially true when it comes to business credit cards and your credit score. Take a look at how they might affect one another. 

Credit inquiries

Some companies may conduct a personal hard credit pull when you apply for a business credit card. It may cause a small, temporary drop in your credit score, and it should resolve shortly. 

Unfortunately, if you have poor personal credit, it can hurt your chances to get approved for a business credit card. Your personal credit score can also affect the type of business credit card you qualify for, specifically the benefits package and interest rates. If your credit isn’t in great shape, you may want to focus on improving it first before you apply for a business credit card. 

Ongoing credit utilization

Some credit card companies will report all of your credit activity, including business cards and loans. This means that your payments on your business credit card can impact your personal credit score. If you’re late on a payment towards your company card, in some cases, it may in turn show up on your personal credit report instead. 

Reporting delinquencies 

Even if a business credit card company doesn’t report your monthly account activity, they may still report on your account if you stop making payments. Credit card delinquencies are a serious financial strain that can spill over between business credit cards and your personal credit score.

Policies for business credit card issuers

Take a look at some of the policies of business credit card issuers that could impact your personal credit. 

Card IssuerReports all activityReports in case of default
American ExpressNoYes
Bank of AmericaNoYes
Capital OneYesYes
CitiNo No
Wells FargoNoNo

Avoiding business and personal credit overlap

Although most banks and credit card companies reserve the right to report delinquency to personal credit bureaus, there are still ways to prevent your business credit card from impacting your personal credit score. Most of the strategies boil down to good credit practices. 

Pay your card on time

It’s critical to pay all your credit card bills every month and on time. Late payments are one of the biggest factors that can hurt both your business and personal credit scores. 

Keep your credit utilization low

You want to refrain from using up your entire credit line, all at once. This impacts your credit utilization ratio, which is the amount of credit you’re using compared to your total limit. Ideally, you want to stay within a low, healthy range to avoid a drop in your credit score. 

Use your credit responsibly

Credit cards can offer many perks like cashback and rewards points. However, if you’re not careful you could wind up spending more than your means, and being stuck with high-interest rate debt. Not only will this hurt both your business credit and personal credit score, it can also harm your finances. Make sure to think twice before charging large amounts. 

Stay on top of your credit score

It’s important to keep a close eye on your credit score and check up on it regularly. Mistakes can happen, and credit bureaus aren’t immune from reporting errors. The sooner you catch such mishaps, the better your credit score will be. 

Don’t apply for too many cards

Most credit card issuers run a hard credit check on personal accounts even for business credit cards. This can cause a temporary dip in your score, which will resolve in time, but can nonetheless create problems in the short run. Applying for multiple cards at once or right after one another can exacerbate this problem. 

Business credit cards can affect personal finances

It’s important to understand how your business credit card can affect your personal credit. Although your business credit and personal credit scores are separate, they can spill over and affect one another. 

It may not be a good idea to take out a business credit card if your personal credit score is already in bad shape. Chances are that lenders will catch on and you’ll find lower approval rates or higher interest rates. 

Besides, when you’re in the market for a credit card, the most important factor to consider is whether you’ll be able to afford paying off your bill every month. It’s also helpful to evaluate the rewards you’ll earn on a business credit card. 

These should have the largest influence on your decision, rather than merely focusing on your credit card’s reporting policy. 


Do business credit cards help build credit?

Yes! Business credit cards can help you build both personal and business credit. Just make sure to follow smart credit card practices, like paying your bills on time and not overspending beyond your means.

Is business credit based on personal credit?

Your business credit reflects the credit history of your business, while your personal credit reflects your own history. Although these are seperate, there are times when they can overlap. For example, if you’re applying for a business credit card, lenders may look into your personal credit score.

Do you need a DUNS number for business credit?

Not necessarily. Most lenders will use your Employer Identification Number (EIN). They may also review your personal credit history.

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