Do Business Credit Cards Affect Personal Credit Score?

Nearly all small-business cards require a personal guarantee, but not all of them report to consumer credit bureaus.
Claire TsosieApr 16, 2021

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If you’re trying to keep your business or side hustle completely separate from your personal finances, it might make your stomach sink to see your business credit card show up on your personal credit report. That's because it means your credit score could suffer because of high debt or a late payment on the business card.

Entrepreneurs may be able to reduce that risk by using a card that doesn't report account activity to consumer credit bureaus. Some business credit cards report only to commercial credit bureaus, not consumer credit bureaus. Some report to consumer bureaus only if you fall way behind on your payments.

NerdWallet reached out to representatives from nine major credit card issuers and asked how they report business credit card activity. Here’s what we found out:

It's important to note that even when business card activity is reported to consumer credit bureaus, it affects only the credit of the primary cardholder — the entrepreneur who applied for the card and the debt on the account. Employees who carry company-issued credit cards generally won't see the activity appear on their personal credit reports.

Further, even if the card doesn't report to consumer bureaus, the personal guarantee remains in effect: The entrepreneur is on the hook for the debt on the account. If that debt goes unpaid and ends up in collections or court, that could be reflected on the cardholder's personal credit report and damage their credit scores.

When business credit card activity shows up on your credit reports, it’s treated the same as any other credit card debt by both the FICO and VantageScore credit scoring methods. Data from that account will affect your length of credit history, credit utilization and payment history, among other factors.

Assuming you have a card that reports to both commercial and consumer credit bureaus, what should you expect?

When you apply for a new business credit card, it typically shows up on your credit reports as a , regardless of how it reports afterward. This could temporarily ding your credit, but it doesn’t necessarily indicate the issuer will report the card's activity to consumer credit bureaus.

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If you can imagine making a few slip-ups with business credit, you might want to get a card that doesn’t report to consumer credit bureaus as a precaution. But generally, it's a better idea to apply for the card that offers the rewards and benefits you’re most interested in, instead of focusing on the card’s reporting policy.

It’s important to be mindful of how your business credit card affects your personal credit. But don’t make the mistake of thinking you can get rid of all your personal liability by choosing a business credit card that doesn't report to consumer credit bureaus. If you want to protect your personal assets, your best bet is to borrow sparingly and pay your bill on time, every time.

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