Do Business Credit Cards Affect Personal Credit? 

Business credit cards are excellent tools for building business credit. Not only are they easier to access than a small business loan, but they’re also easier to manage without financial strain due to their revolving nature. 

However, using business credit cards can affect your personal credit and not necessarily in a good way. Let’s explore what you should know about the relationship between your business credit cards and personal credit score. 

What Do Issuers Report to the Credit Bureaus? 

How Business Credit Cards Affect Personal Credit 

One of the most common ways business credit cards affect personal credit happens when you first apply for them. Because prospective cardholders often lack business credit, card issuers usually check your personal credit score before approving you. 

To run a personal credit check, issuers must initiate a hard inquiry, which shows up on your personal credit report and can cost you points. Fortunately, it has a relatively small effect on your score. 

If you’re approved, issuers may also choose to report your business credit card activity to a personal credit bureau, which has a much higher impact on your score. However, they often make a distinction between positive and negative activity. 

Positive activity refers to the things that would benefit your personal score. For example, that would include making timely payments and keeping your credit utilization low. 

Meanwhile, negative activity refers to mistakes that damage your personal credit, such as making your monthly payments late and defaulting on your account. 

Many card issuers report negative but not positive activities, while others report neither or both. Unfortunately, there aren’t any that report positive but not negative activities. 

As a result, the best way to protect your personal credit score from your business’s financial risks is to choose a card from an issuer that doesn’t report anything to the consumer credit bureaus, like Bank of America or Wells Fargo. 

Every card issuer has a unique reporting policy and sends different data to different credit bureaus. It’s usually beneficial to pick ones that report to your target business bureaus but send as little information as possible to the personal ones. 

To do so, you must understand the reporting policies of each corporate credit card issuer. They usually don’t disclose them, but we’ve cobbled together most of the major ones, which you can see above. 

You can use this information to help determine which is the best business credit card for you. Incorporate it into your decision alongside other factors like cash-back rewards programs, credit score requirements, annual fees, and customer reviews. 

For example, Citi is the only major business credit issuer that reports to all four main business credit bureaus but never the personal ones, making it an attractive prospect. However, it only has two business credit cards, which limits its practicality. 

How To Keep Your Business Credit in Top Shape 

Opening a small business credit card that reports to the right mix of commercial and consumer credit bureaus is essential for building business credit. Here are some other impactful things you can do to improve your score. 

Use eCredable 

eCredable doesn’t offer a credit account but can transform an unlimited amount of recurring expenses into vendor tradelines, even if you have bad credit. You can use it to report monthly payments for costs like office rent to Equifax Business and Creditsafe. 

If you’ve been paying business expenses for a while, we can also report up to 24 months of historical payments. That can help you establish two years of credit history very quickly, which even the best credit card can't do. 

Meanwhile, we’ll report your monthly payment for the eCredable subscription to D&B and Experian Business, building your score with all the primary business credit bureaus. Give it a try today! 

Monitor Your Credit Scores 

Just as you should regularly monitor your personal credit history, you should keep a close eye on your business credit scores. That helps you catch potential issues early and determine when to take additional steps in your credit-building efforts. 

However, the Fair Credit Reporting Act (FCRA) that applies to consumers doesn’t extend to small businesses. That means your company isn’t eligible for the benefits it provides, like free annual credit report copies. 

Unfortunately, you’ll usually need to pay to access your data. The most affordable option is typically a business credit monitoring service like Nav, which works like Credit Karma for companies. 

Dispute Errors 

When you secure copies of your business credit reports, always double-check their details. Errors occur more frequently than you may expect and can significantly hurt your score, especially if they affect your payment history. 

Fortunately, the business credit bureaus let you dispute any mistakes you find, even though the FCRA doesn’t extend to businesses. However, you may find the process less convenient than the consumer versions. 

Pay Your Bills on Time 

Credit scores are primarily tools for creditors to assess whether borrowers will pay what they owe. As a result, payment history is the most impactful scoring factor for most of them, including business credit scores. 

In fact, it’s the only scoring factor for the PAYDEX Score, which is Dun & Bradstreet’s flagship business credit score and one many creditors use frequently. 

Therefore, you should prioritize making your monthly payments on time over all other credit-building activities. You can set up automatic payments to make sure you never miss one by accident, just like you would with a personal credit card. 

Use Your Credit Cards Responsibly 

A small business owner can hurt their score by accidentally paying late, but that’s hard to do with modern software. The much more significant risk is that you’ll overextend yourself financially and find yourself lacking the cash flow to fulfill your obligations. 

To minimize the chances of that happening, use your credit cards responsibly. The safest approach is to spend no more than you have in cash to ensure that you always have enough to pay off your balances. 

If you forego that strategy and use your business credit card to bridge gaps in your company’s cash flow, maintain a manageable credit utilization by keeping your balance well below your credit limit. 

Business credit can take several years to build, so don’t wait to get started. Sign up for eCredable and apply for a business credit card today! 

Learn More About Building Business Credit: 

- What Is a Business Credit Builder Card?
- Which Business Credit Cards Report to Dun & Bradstreet? 
- Which Business Credit Cards Do Not Report Personal Credit?