Do business credit cards affect your personal credit score?
- How business credit cards affect personal credit
- Understanding business credit vs. personal credit
- Which business credit cards report to personal credit bureaus?
- Whose credit do business credit cards affect?
- Should you use a business credit card that doesn’t report to personal credit bureaus?
- How to protect your personal credit
- Does a corporate credit card affect your credit score?
- Build business credit with Ramp without impacting your personal credit score
A business credit card can affect your personal credit score, but it depends on the type of card, how the credit card issuer reports your card activity to credit bureaus, and how you use the card.
We cover how business and personal credit are connected, which business cards report to personal credit bureaus, and the steps you can take to protect your personal credit. You’ll also learn when using your business card can actually help your credit, and when it could hurt it.
How business credit cards affect personal credit
If you apply for a business credit card, your personal credit score will likely take a temporary hit due to a hard inquiry from the credit card issuer. However, the impact is usually minor and brief.
This happens because most credit issuers rely on your personal credit for approval and require a personal guarantee.
How personal guarantees work
A personal guarantee means you’re personally responsible for repaying the debt if your business can’t. Lenders require it to reduce their risk, especially for new or small businesses without established credit.
If your business defaults, the lender can pursue repayment from your personal assets, and the missed payments will show up on your personal credit report. This applies not only to business credit cards but also to loans and other financing tied to your Social Security number (SSN).
Credit utilization factors
Whether a business credit card affects your personal credit utilization depends on how the issuer reports activity. Some issuers report all activity, such as balances, on-time payments, and delinquencies, to personal credit bureaus such as Equifax or Experian. Others only report negative activity, such as late payments or serious delinquencies.
If your card reports all activity, the balance will count toward your personal credit utilization ratio. A high ratio, or using a large percentage of your available credit, can lower your score, even if you pay on time. On the other hand, keeping balances low and making consistent payments can help strengthen your credit profile.
Use your EIN to apply for your business credit card.
Getting a business credit card using your employer identification number (EIN) helps build your business credit. A good business credit score can lead to more favorable loan terms and repayment options.
Understanding business credit vs. personal credit
Your business credit score is linked to your EIN, which is your business’s tax ID number. You can apply for an EIN number online after registering your business with the state.
Business credit is built through accounts in your business’s name, such as small business loans, lines of credit, and business credit cards. You can check your business credit score with the three major business credit bureaus: Dun & Bradstreet, Equifax, and Experian. Business credit scores typically range from 0 to 100, with higher scores reflecting stronger creditworthiness.
Your personal credit score is tied to your SSN. This score reflects your personal credit history, including credit card usage, loan repayment, and other financial activities tied to your personal identity. Personal credit scores generally range from 300 to 850 and play a significant role when you’re seeking consumer credit cards, personal loans, or mortgages.
Category | Business credit | Personal credit |
|---|---|---|
Identification | Uses your EIN | Uses your SSN |
Reporting bureaus | Tracked by commercial bureaus | Tracked by consumer bureaus |
Scoring models | Ranges from 0 to 100 | Ranges from 300 to 850 |
Purpose | Qualifies you for business financing | Qualifies you for personal financial products |
Does business credit affect personal credit?
Business credit can affect your personal credit in certain situations. While most business accounts are kept separate, your personal score may reflect an account reported to consumer credit bureaus, or if you provide a personal guarantee and the business defaults.
For example, some business credit cards and loans will appear on your personal credit report if payments are late or the account becomes seriously delinquent. In these cases, negative marks can stay on your report for years, making it harder to qualify for future credit and potentially raising borrowing costs.
What’s the difference between personal vs. business credit bureaus?
The key difference between personal and business credit bureaus is that business credit reports help assess the financial health and creditworthiness of businesses, while personal credit reports help evaluate individuals' credit behavior and ability to repay personal debts.
Which business credit cards report to personal credit bureaus?
Personal credit bureaus don’t usually see business credit card activity, but there are exceptions:
Issuer | Reports to consumer credit bureaus | Reports to commercial credit bureaus |
|---|---|---|
Yes, but only if the account is seriously delinquent | Yes | |
No | Yes | |
Yes, the Capital One Spark Cash Plus and Venture X business credit cards report delinquencies | Yes | |
Yes, but only if the account is seriously delinquent | Yes | |
No | Yes | |
U.S. Bank | Yes, but only if the account is seriously delinquent | Yes |
No | Yes |
If your business card issuer reports to consumer credit bureaus, late payments or defaults can damage your personal credit score for years. This can make it harder to qualify for new credit, lead to higher interest rates, and reduce your overall borrowing power. Even a single 30-day late payment can cause a significant score drop, so it’s important to monitor payment deadlines.
Whose credit do business credit cards affect?
When business credit card activity is reported to the consumer credit bureaus, it typically only affects the primary cardholder, or the business owner who opened the card and personally guaranteed any credit card debt.
Sometimes, you may want to add an authorized user to your business credit card. In that case, it could also affect the authorized user’s credit report.
Primary cardholders
Whoever applies for and receives approval for a small business credit card is considered the primary account holder. Usually, this is the owner of the company, not an employee.
When you open the card as the primary account holder, the tax identification number you provide will determine whether the card reflects on your personal or business credit score. If you open the card with your SSN, it’ll be linked to your personal credit score. Opening the card with your business’s EIN will keep your business credit score separate.
If you open a card with your SSN, you’ll probably also have to provide a personal guarantee of repayment so that lenders know you’ll personally repay any debts if your business account defaults on its payments.
Authorized users
An authorized user is someone the primary cardholder adds to a credit card account. In the case of business credit cards, this is usually an employee. This allows your employee to make purchases on the card as if it were their own.
How an authorized user or you, the primary cardholder, use the card can affect the user’s credit score. Timely payments may help build credit, while missed payments can damage it.
If more than one person can use a card, your business needs a system for employee credit cards that identifies who used the card and who should approve the purchase. An employee credit card agreement usually outlines this.
Should you use a business credit card that doesn’t report to personal credit bureaus?
Choosing a business card that doesn’t report to personal credit bureaus can be a smart move if you want to protect your personal credit score. The biggest advantage is that your business spending and balances won’t impact your personal credit utilization, and your personal score won’t drop if you carry a balance.
The trade-off is that some non-reporting cards may have stricter approval requirements or offer fewer rewards and higher annual fees. If your top priority is separating personal and business credit, a non-reporting card can be worth it. On the other hand, if you value rich rewards or flexible approval, you may find more options among cards that report.
How to protect your personal credit
Here are some simple, practical steps you can take to keep your business activity from crossing over into your personal credit:
- Apply for a business credit card in your company’s name, and use an EIN instead of your SSN whenever possible
- Limit personal guarantees to only the accounts you truly need, since they tie your personal credit to business debts
- Make all payments on time to avoid negative marks on your credit reports
- Keep balances low to prevent high credit utilization ratios
- Regularly check both your personal and business credit reports for potential errors
- Build business credit by using accounts that report to business credit bureaus, paying vendors promptly, and strategically managing any business debt
Does a corporate credit card affect your credit score?
Corporate credit cards generally won’t affect your personal credit score. This is because most corporate cards use your business’s EIN, not your personal SSN, and they typically don’t require a personal guarantee. Business owners and employees alike shouldn’t see any changes to their personal credit scores when using a corporate card.
How corporate cards are different from traditional business credit cards
Corporate cards are typically tied to the business’s liability, often used by multiple employees, and typically require the company to meet certain revenue or expense thresholds. This makes them different from small business credit cards, which are usually linked to the owner’s personal credit and often require a personal guarantee.
As a business owner, corporate cards differ from traditional business credit cards in how they affect your business credit report:
- No impact on credit utilization ratios: You don’t have to worry about your credit limit or how much of your available credit you’re using
- Full balance due monthly: Payment is typically required in full each month and often comes out of your business bank account automatically, which reduces the risk of carrying debt or making late payments
In rare cases, a corporate card might affect personal credit if a smaller company’s program still requires a personal guarantee, if the issuer conducts a soft or hard credit check, or if the business makes a billing mistake and places the card in an employee’s name.
Build business credit with Ramp without impacting your personal credit score
The Ramp Business Credit Card doesn’t require a credit check or personal guarantee, so it won't affect your personal credit score when you apply. All you need to qualify is an EIN attached to your registered business and at least $25,000 in any U.S. business bank account.
Unlike traditional business credit cards, the Ramp Business Credit Card requires full monthly balance payments. That means no interest charges, no carrying debt, and no risk of late payments hurting your score. At the same time, we report activity to business credit bureaus, helping you build your company’s credit profile.
Plus, our advanced spend controls let you automate many of the factors that can harm your personal and business credit score. Set custom spending limits, automate expense reports, and get a clear, real-time view of your company’s cash flow.
Ready to get started? Explore a free interactive product tour.
FAQs
You can build personal and business credit at the same time, but you need separate accounts for each. Personal credit cards report to consumer credit bureaus, and business credit accounts report to commercial credit bureaus. Using the right accounts in each category and keeping them in good standing allows you to build both scores simultaneously.
If your LLC has debts taken out in the company’s name, repaying your debts on time affects only the LLC’s business credit report. An LLC loan will only impact your personal credit if you cosign or guarantee it. If you don't do so, your personal credit report will remain unaffected.
Applying for a business credit card can cause a small, temporary drop in your personal credit score, as most credit card issuers run a hard inquiry during the application process. The impact is usually minor and fades within a few months if you manage your accounts responsibly.
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