Small business credit cards can be relatively easy to obtain and they often come with generous perks such as a hefty bonus for new card members or a rewards program that enables you to earn lots of points or miles on your everyday business expenditures.
But when you apply for a business credit card, one of the most important things to consider is which credit bureaus the card issuer reports to. Sometimes, business cards report your borrowing behavior on your personal credit history, while other times the card issuer only reports to your business credit file.
Why do you need to know which business credit cards do not report to your personal credit? This matters because it means your behavior with your business credit card could affect your personal credit score as well as your ability to build business credit.
This guide will help you to understand what information, if any, different business card issuers will put on your personal credit report. It will also explain why this is important in terms of building and maintaining a good credit score.
- What does it mean to report to a credit bureau?
- Pros of a business credit card that shows up on your credit report
- Cons of a business credit card that shows up on your personal credit report
- Which business credit cards do not report personal credit?
- Recommendations for business credit cards that do not report to personal credit
- Bottom line
What does it mean to report to a credit bureau?
In the United States, there are three major credit reporting agencies — Equifax, Experian, and TransUnion — that collect information on your personal credit history. Credit card companies (and other lenders) provide details to these agencies about the amount you borrow and whether you pay on time or are late in repaying your debts. All the information collected then determines your credit score.
There are also credit reporting agencies that collect information on businesses. While Equifax maintains both business and personal credit histories, there are some agencies such as Dun & Bradstreet that exclusively specialize in business credit files. Regardless of the agency, business credit reports are a separate thing from the personal credit reports of individual business owners.
But in some cases, business credit cards will require a personal guarantee when you open one. When this happens, your company's borrowing behavior on the business credit card — such as how much you've borrowed relative to your available credit and whether you pay on time — could show up on your personal credit report and impact your credit score. Late payments, for example, could reduce your score as would borrowing too much on your business credit cards and ending up with a high credit utilization ratio.
On the plus side, business cards also generally report data on payments and borrowing behavior to the business credit reporting agencies. So, if you develop a positive history of on-time payments, this can help your company build credit so the business can more easily qualify for loans in its own name. But if you pay late or default, this can hurt your company's credit.
Pros of a business credit card that shows up on your credit report
There are some benefits to having a business credit card show up on your personal credit report, including the following:
- Your business card could help you develop a positive payment history: This is the most important factor that determines your credit score. If your company always pays on time, this will help you build credit.
- Your business card could help with your credit utilization ratio: This is the ratio of credit used versus credit extended to you. For example, if you had $10,000 in available credit, but you’ve only spent $3,000 then you would have a utilization score of 30%. If your business card has a large line of credit and you don't charge much on it, this could give you a lower utilization ratio and lower is always better when it comes to this ratio.
Cons of a business credit card that shows up on your personal credit report
There are also some downsides to business credit cards being reported on your personal credit history. These include the following:
- Late payments or a default could hurt your personal credit score: If you pay your business credit card late, this could be reported on your personal credit history and do serious damage to your score.
- Your business debt could affect your debt-to-income ratio: When your company borrows on the card, the debt will show up as an obligation you're responsible for. This is factored in when lenders look at your debt payments relative to income. A debt-to-income ratio that is too high can sometimes disqualify you from getting a loan. If you are looking to take out personal loans in the future, this could be a negative for you.
- High credit utilization could reduce your credit score: When your credit utilization is above 30%, your credit score suffers. If you charge a lot on your business card and it’s reported on your personal credit history, this could drag down your score.
- You'll get a hard inquiry on your credit report: When you apply for a business card and the card issuer checks your personal credit, you'll show a hard inquiry on your credit report that stays there for two years. While one inquiry is not a big deal, too many inquiries can lower your credit score.
Which business credit cards do not report personal credit?
The table below shows which business credit card issuers will report information about your business card to your personal credit history.
|Card issuer||Reports activity to personal credit report||Reports ALL info to personal credit report||Reports only NEGATIVE info to personal credit report||Reports activity to business credit bureaus|
|Bank of America||Yes||No||Yes||Yes|
Even among the card issuers that report only negative information to your personal credit, there are different rules for when these reports are made. Chase will report late payments on your personal credit report only if you are more than 60 days late in making a payment, while American Express reports any time your account is not in good standing, and Bank of America reports any time you are delinquent in paying.
Our recommendations for business credit cards that do not report to personal credit
If you're looking for the best business credit cards that don't report information to your personal credit history, here are a few great options — as well as why we recommend them.
CitiBusiness / AAdvantage Platinum Select Mastercard
The CitiBusiness / AAdvantage Platinum Select Mastercard is a great choice for business owners that routinely travel with American Airlines.
It provides a 65000-mile bonus for new cardmembers who spend $4,000 or more on the card within the first 4 months of opening the account.
It also has a generous rewards program offering 2X miles for many different kinds of spending companies commonly do, including American Airlines purchases, and purchases from telecommunications merchants, cable and satellite providers, car rental merchants, and gas stations.
Frequent American Airlines travelers will also benefit from a free checked bag on American flights, preferred boarding, and 25% savings on in-flight food, beverages, or WiFi purchases. These perks more than make up for the card's $99 (waived first year) annual fee.
Wells Fargo Business Platinum Card
This card is an ideal choice for bigger businesses as you can get up to 99 employee cards for free with no annual fee charged. The structure of its rewards program — which gives extra bonuses to bigger spenders — also makes this card far more attractive to larger companies with more spending needs rather than smaller businesses.
The card provides a $500 cashback bonus for new cardmembers after just $5,000 in spending. While this isn't the most generous welcome bonus, it's relatively easy to earn — and the card charges no annual fee so there's no costs to make up for.
And while this card provides just one rewards point per dollar spent, it does offer 1,000 bonus points for any monthly billing cycle where your company spends at least $1,000.
Wells Fargo Business Secured Credit Card
If your company is trying to build credit, the Wells Fargo Business Secured Credit Card is the perfect choice for you. It is a secured card, which means you’ll deposit money down as collateral in the event you can’t make a payment. This makes it easier to qualify for the card, even if you don’t have a long credit history.
There is just a $25 annual fee per card issued, so this card is good for a business trying to get off the ground that can't afford a big cost just for becoming a card member.
The card provides 1.5% cash back per dollar spent, or earn 1 point per dollar spent and receive 1,000 bonus points each month you spend more than $1,000, so you can choose how you want to structure your rewards. If your company is charging a lot when your business is just getting off the ground, the monthly bonus points can be a great perk.
Wells Fargo enables your business to access a credit line anywhere from $500 to $25,000, which gives you ample flexibility. And Wells Fargo periodically reviews your credit history to see if you can upgrade to an unsecured card after demonstrating responsible borrowing behavior.
Before you apply for a business credit card, it's always important to find out whether it will report your borrowing behavior to your personal credit report. Knowing which business credit cards do not report to your personal credit could help you decide which card is the right one for you.
Remember, though, that even if the card issuer doesn't generally share information with consumer credit reporting agencies, you could still be responsible for repaying credit card debt if you've given a personal guarantee.