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Do business credit cards impact my credit score?

Feb. 23, 2022
6 min read
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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 impact your credit score — even if you pay your bills on time and in full every month.

We reached out to 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 could cause a small, temporary drop in your credit score, but reporting regular activity could have more lasting implications, especially if your business runs up big monthly credit card bills.

Here’s a look at issuers’ reporting policies.

IssuerCredit check with consumer credit bureaus during 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 ExpressYes.Yes.Yes, in the event of a default.Yes.
Bank of AmericaYes.Yes.No.Yes.
Capital OneYes.Yes.Declined to answer, but reports indicate yes.Declined to answer.
ChaseYes.Yes.“Business Card Customers may be reported to Consumer Credit Bureaus per bank policy.”Accounts “are reported to the commercial credit bureau.”
Wells FargoYes.Yes.No.Yes, Wells Fargo reports to Small Business Financial Exchange.

How business credit cards can impact your credit score

If your business card activity — not just the hard inquiry for opening the account, but your actual account activity on an ongoing basis — 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 and they have access to your business credit card as authorized users, it should appear on your credit report only, not theirs.

All of the issuers we contacted are pretty clear on a couple of things: If you stop paying your credit card bill, you will be held personally responsible for what’s owed, even if the account doesn’t appear on your personal credit report. Some issuers — American Express and Chase included — require both joint and several liability, meaning that both you and your business are liable for repayment. They all also will report your card activity to one or more business credit bureaus.

Business credit bureaus — including Dun & Bradstreet, Equifax and Experian — all look for similar trends in business credit card activity as consumer bureaus do for consumer cards. Experian, for instance, says payment history is the top factor to pay attention to when looking to improve your business score. It also looks at how much you owe, how long you’ve been in business and whether you have collections, liens or bankruptcies in your past.

About two-thirds of your credit score is determined by just two factors: Your payment history and what you owe. You can control the first by always paying your bill on time. You can somewhat control the second by paying your bill in full. But even if you pay your bill in full and on time, 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 than you might think it is. The ratio — basically the amounts you owe versus the total credit available to you — could impact your credit score and your creditworthiness.

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Related: 6 things to do to improve your credit in 2022

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

Image byHero Images / Getty Images
Image by Hero Images / Getty Images

Some of the 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, for example, declined to say whether it reports any activity to either consumer or commercial bureaus, but the company has previously acknowledged it reports to both types of bureaus, while cardholders have said they’ve seen Capital One business cards on their personal credit reports.

Meanwhile, Chase says it “may” report business cards to consumer bureaus and American Express says business card account information “is reported to both the consumer and commercial bureaus,” but based on reader reports, neither issuer routinely reports business card accounts to personal credit agencies. However, both issuers in the past have suggested there’s a negative trigger for when business accounts get reported to bureaus — with a late (or no) payment, for example.

Barclays confirmed that it runs a credit check and reports users' activity to both business and consumer credit bureaus. In practice, Barclays' record on reporting business accounts is mixed, so your mileage may vary with them. We didn’t have any official answers from Citi, but 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 on your personal credit report. You’ll just have to pay special attention to following these rules to keep your credit score unharmed:

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

If you find yourself bumping up against that limit consistently, 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.

Additional reporting by Liz Hund and Robert Thorpe.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.