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Brittney started her writing career in the world of science, putting her physics degree to good use. Her journey into finance started with building her personal credit, but soon grew into a borderline obsession with credit cards and travel rewards. For the last 7 years, she has enjoyed the ability to share her expertise with readers, as well as the opportunity to interview companies and individuals making an impact on our financial lives. She wholly believe most problems can be solved with the right research -- and a good spreadsheet -- and she specializes in translating complex financial topics into actionable advice to help educate and empower readers.
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Business credit cards are a great way for small business owners to keep business expenses completely separate from their personal expenses. Though business credit cards can help demarcate your expenses, your credit history may not be quite so separate.
Until your company meets the criteria for a corporate credit card, your business credit cards is inextricably tied to your personal credit in one way or another. This starts from the very beginning, because every business credit card application includes a personal credit check.
So, do business credit cards affect my credit score? Yes, absolutely. But that's not the only question to ask. Do business credit cards affect my credit score after I'm approved? That answer is a lot more complicated. We'll break it down.
Business credit cards and the personal guarantee
Something key to realize about business credit cards is that you, as the primary cardholder, are responsible for the debt. This is called a "personal guarantee," and it's found in the terms and conditions of virtually every business credit card. Personal guarantees are required for sole proprietors and LLCs alike. The game can change at corporate level, but that's an entirely different credit product.
In other words, just because a credit card is in your business's name instead of your own doesn't mean you're off the hook for the balance -- or for the credit score damage if you're delinquent. The personal guarantee means tanking your business credit can also tank your personal credit score.
That said, the day-to-day impacts of business credit cards on your personal credit score vary.
Initially, the impact is minor. Because credit card issuers rely on your personal guarantee, they pull your credit report when you apply for business credit cards. This hard credit inquiry winds up on your personal credit report, likely dinging your credit score a few points.
After you're approved, the effect your business credit cards have on your personal credit depends on which company issued your card. Some credit card issuers report your business card's activity to the consumer credit bureaus every month, exactly as they would a personal account. Other issuers don't report your balances or payment history unless your account becomes delinquent.
Which issuers report business credit cards to consumer credit bureaus?
Although your business credit cards always have some impact on your personal credit score, you can minimize the everyday influence of your business cards. Here is a look at which issuers are known to regularly report business credit card activity to consumer credit bureaus:
American Express
No
Bank of America
No
Barclaycard
Sometimes
Capital One
Yes
Chase
No
Citi
No
Discover
Yes
U.S. Bank
No
Wells Fargo
No
Of course, it's worth pointing out that this refers just to regular activity, like monthly balances. If your account becomes delinquent -- typically 30-plus days late -- any issuer is very likely to report your account as delinquent to both business and consumer credit agencies.
Just as with a personal card, a delinquent business card account has a profound and long-lasting negative impact on your personal credit score.
The potential credit score impacts from business credit cards
There are several factors determining your credit score that can be impacted by a business credit card, including:
Payment history
Credit utilization
Length of credit history
Credit mix
New credit
From the start, your business card influences your new credit factor thanks to the hard credit inquiry from the application. Your business credit cards reporting to your personal credit can have additional impacts, particularly in your account age. Scoring agencies look at the length of your overall credit history and the average age of all of your credit accounts. A new credit card, business or personal, decreases your average account age, thus decreasing your credit score.
Credit utilization
Credit utilization can be especially impacted by a business credit card.
Basically, credit scoring agencies look at how much credit you are using as a function of how much credit you have available, and this ratio is known as your utilization rate. If your issuer reports your business card balances to the consumer bureaus, the purchases you make for your company could increase your personal utilization rate.
A high utilization rate can decrease your credit score, so your personal credit can suffer if you frequently make large purchases with your business credit cards. However, paying down your balance will help improve your credit score again. And if you rarely make large purchases, a business card added to your personal credit report could actually be good for your credit score.
Don't be afraid of impacting your personal credit score
Even the smallest of small businesses need access to credit. Though there can be a number of credit score impacts from business credit cards showing up on your personal credit report, most are minor -- so long as you're using your business cards responsibly.
Below, we've listed three of our top-rated business credit cards. To see more, check out our full list of the Best Business Credit Cards.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 4.25 out of 5 stars.
4.25/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Rating image, 3.75 out of 5 stars.
3.75/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
= Best
= Excellent
= Good
= Fair
= Poor
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Good/Excellent (670-850)
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Good/Excellent (670-850)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Good/Excellent (670-850)
Credit Rating Requirement:
Falling within this credit range does not guarantee approval by the issuer. An application must be submitted to the issuer for a potential approval decision. There are different types of credit scores and creditors use a variety of credit scores to make lending decisions.
Recommended Credit Score required for this offer is: Fair/New to Credit Under(669)
Poor
Fair
Good
Excellent
300-579
580-669
670-739
740-850
Fair/New to Credit Under(669)
Welcome Offer:
Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening.
Earn $750 bonus cash back
Welcome Offer:
70,000 Membership Rewards® points after you spend $10,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership
70,000 Membership Rewards® points
Welcome Offer:
N/A
Rewards Program:
Earn unlimited 1.5% cash back on every purchase made for your business
Earn unlimited 1.5% cash back on every purchase
Rewards Program:
4 points per $1 in two of the following categories where you spend most: gas, dining, advertising, transit, electronics & wireless ($150,000 annual spending cap). 3 points per $1 on flights and prepaid hotels booked on AmexTravel.com. 1 point per $1 on other purchases
1x - 4x points
Rewards Program:
1% cash back
Intro APR:
0% Intro APR on Purchases
Purchases: 0% Intro APR on Purchases, 12 months
Balance Transfers: N/A
Intro APR:
Purchases: N/A
Balance Transfers: N/A
Intro APR:
Purchases: N/A
Balance Transfers: N/A
Regular APR:
18.49% - 24.49% Variable
APR:
19.49%-27.49%, variable
Regular APR:
29.99%, variable
Annual Fee:
N/A
$0
Annual Fee:
$375
Annual Fee:
$0
Highlights:
Earn $750 bonus cash back after you spend $6,000 on purchases in the first 3 months from account opening
Earn unlimited 1.5% cash back on every purchase made for your business
No Annual Fee
Redeem rewards for cash back, gift cards, travel and more through Chase Ultimate Rewards®.
Earn rewards faster with employee cards at no additional cost. Set individual spending limits for greater control.
Round-the-clock monitoring for unusual credit card purchases
With Zero Liability you won't be held responsible for unauthorized charges made with your card or account information.
0% introductory APR for 12 months on purchases
Member FDIC
Highlights:
Welcome Offer: Earn 70,000 Membership Rewards® points after you spend $10,000 on eligible purchases with the Business Gold Card within the first 3 months of Card Membership.
MORE REWARDS: Get 4X Membership Rewards® points on the 2 select categories where your business spent the most each month. Earn 3X points on flights & pre-paid hotels booked on AmexTravel.com. 1X is earned for other purchases.
4X points apply to the first $150,000 in combined purchases from these 2 categories each calendar year.
Terms Apply
Highlights:
Earn unlimited 1% cash back for your business on every purchase, everywhere, no limits or category restrictions. Plus, earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel.
No annual fee
Build and strengthen credit for your business by using this credit card responsibly
$0 Fraud Liability if your card is lost or stolen
Free employee cards, which also earn unlimited 1% cash back on purchases
Rewards won't expire for the life of the account, and you can redeem your cash back for any amount
The information for the American Express Business Gold Card has been collected independently by The Ascent. The card details on this page have not been reviewed or provided by the card issuer.
We're firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. The Ascent, a Motley Fool service, does not cover all offers on the market. The Ascent has a dedicated team of editors and analysts focused on personal finance, and they follow the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
American Express is an advertising partner of The Ascent, a Motley Fool company. Wells Fargo is an advertising partner of The Ascent, a Motley Fool company. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Bank of America is an advertising partner of The Ascent, a Motley Fool company. Brittney Myers has positions in American Express. The Motley Fool has positions in and recommends Bank of America, JPMorgan Chase, and Target. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.
The Ascent is a Motley Fool service that rates and reviews essential products for your everyday money matters.