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Do business credit cards affect personal credit?

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Editor’s note: This is a recurring post, regularly updated with new information.

One good reason business owners should consider opening a small-business credit card is to keep that credit line off their personal credit file. But while some issuers only report business card activity to business credit bureaus, the practice is not universal. That could mean your issuer is reporting your good — or bad — actions to consumer credit bureaus, just like with your personal credit cards.

Although opening a business credit card can help you separate your business expenses from your personal ones, if the issuer reports your card activity to a consumer bureau, it could affect personal credit — even if you pay your bills on time and in full every month.

How do business credit cards affect personal credit?

If your business card activity appears on your personal credit report, it will have the same impact as the rest of your credit cards.

For issuers that report business card activity to personal reports, there’s one major exception to this rule: If you have employees with access to your business credit card as authorized users, it should appear only on your credit report.

If you stop paying your credit card bill, you will be held responsible for what’s owed. American Express and Chase require both joint and several liability, meaning that both you and your business are liable for repayment and thus reporting your card activity to one or more business credit bureaus.

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Business credit bureaus — including Dun & Bradstreet, Equifax and Experian — look for trends in business credit card activity similar to that of consumer bureaus.

Experian says payment history is the top factor to pay attention to when looking to improve your business score, in addition to money owed, business establishment history, and negative marks on your credit.

About two-thirds of your credit score is determined by your payment history and what you owe. Stay in control by always paying your bill on time and paying your bill in full. Despite this, the issuer may report your account status to the credit bureaus before your monthly payment clears, meaning your credit utilization ratio may be reported to be higher, affecting your creditworthiness

Related: 6 things to do to improve your credit score

Business credit card credit reporting by issuers

We contacted more than a half-dozen issuers to ask about their reporting policies on their small-business credit card lines. Some issuers were more forthcoming than others, but they all indicated they make a hard inquiry (or at least reserve the right to) on your personal credit report during the application process.

A hard pull can cause a small, temporary drop in your credit score, but reporting regular activity can have more lasting implications, especially if your business runs up big monthly credit card bills.

Issuer Credit check with consumer credit bureaus during the application process? Credit check with business credit bureaus during the application process? Reports card activity to consumer credit bureaus? Reports card activity to business credit bureaus?
American Express Yes Yes Yes, in the event of a default Yes
Bank of America Yes Yes No Yes
Barclays Yes N/A Mixed reports N/A
Brex No No No Yes
Capital One Yes Yes Declined to answer, but reports indicate yes Declined to answer
Chase Yes Yes “Business Card Customers may be reported to Consumer Credit Bureaus per bank policy” Accounts “are reported to the commercial credit bureau”
Citi Yes N/A No N/A
Wells Fargo Yes Yes No Yes, Wells Fargo reports to the Small Business Financial Exchange

What types of business credit card activity is reported to the credit bureaus?

Some issuers are less clear about the circumstances under which they’ll report business card activity to personal bureaus, but we can determine their usual practices based on reader reports and other sources.

Capital One declined to say whether it reports any activity to either consumer or commercial bureaus, but has previously acknowledged it reports to both types of bureaus, with cardholders saying they’ve seen Capital One business cards on their personal credit reports.

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American Express explicitly states business card account information “is reported to both the consumer and commercial bureaus,” while Chase states it may report business cards, but reader reports state it isn’t routine and occurs with a negative trigger on a business account.

Barclays says it reserves the “right to obtain a current consumer and business credit report” and the “right to report to others”, with cardholders giving mixed reports on their practices. Readers report that most Citi business cards are not reported on personal credit reports.

Related: 8 reasons to get a business credit card

Bottom line

It’s not the end of the world if your business credit cards end up affecting your personal credit report — just make sure you’re a responsible cardholder. Pay special attention to following these rules to keep your credit score from being negatively affected:

  • Pay your card bills on time every time
  • Try to stay well below your credit limit

If you find yourself consistently bumping up against that limit, ask your issuer for a higher limit or switch to a card that offers no preset spending limit. Since charge cards have no preset limit, activity won’t impact your utilization ratio.