Does My Business Credit Affect My Personal Credit?

By Turtle Credit Team

Almost everyone has a personal credit score. By paying bills consistently, repaying debt promptly, and not over-borrowing, you’ll ensure a healthy credit score and enjoy the benefits that come along with that. (Low-interest rates, trust among lenders and generous lending allowances, etc.) A business credit score works similarly, just for a business instead of an individual. Simple enough, right? The question is: can a business’ credit score affect its owner’s personal score, and if so, how? Let’s find out.

Personal Credit Checks

Firstly, lenders will run a personal credit check on you when applying for a business credit card (if a said business has a little credit history of its own). Your personal credit history will impact the terms of any credit you receive. Your personal credit score will also suffer slightly due to the credit check (one of the reasons it’s ill-advised to apply for credit too often). The larger a business is and the more credit history of its own it accrues, the less likely it will occur. In fact, some business lenders only look at a business’ credit history, never the personal history of its owner.

Personally, Guaranteed Debt

It’s generally accepted as a best-practice to keep business and personal affairs separate. When it comes to the inherent nature of credit, especially for small businesses, this can prove difficult, to say the least. For one, opening a new credit account as a small business owner requires you to personally guarantee the debt. This means that your business’ repayment performance—whether good or bad—can reflect upon your personal credit score. Plus, consistent failure to pay will see you personally taking on your business’ debt. Small business credit accounts should treat any obligation as an extension of your personal debt, or else suffer potentially dire repercussions.

Non-Reporting Card Issuers

Not all business credit cards automatically report your business-spending activity to the three major consumer credit bureaus ( Equifax, TransUnion, and Experian). If you’re determined to keep your personal and business expenses separate, check each card issuer’s terms and choose one that doesn’t automatically report your business activity on your personal credit. There is a caveat to this: most card issuers (even those that don’t typically report business activity) will report your activity to the credit bureaus if you default on your debt (fail to pay for any reason).

Following are the policies of the major business credit card issuers at a glance:

Business credit card information reported on owner/cardholder’s personal credit reports

Issuer	All Activity	Default/Negative
American Express	No	Yes
Bank of America	No	No
Capital One	Yes*	Yes
Chase	No	Yes
CitiBusiness	No	No
Discover	Yes	Yes
PNC	No	No
US Bank	No	No
Wells Fargo**	No	No

*Capital One activity is flagged as ‘small business’ when reported to personal credit reports.

**Wells Fargo generally does not report negative information to the owner’s personal credit, but reserves the right to do so.

Business Employees

If you’re an employee of a business who has been issued a company card (for travel, supplies, expenses, etc.), the above likely doesn’t apply to your situation. Your spending on behalf of the company will likely have zero impact on your personal credit score, although it might make a small difference—it never hurts to check your personal credit report and make sure.

Wrap Up

To sum up, your business credit can absolutely impact your personal credit, but how major of a concern is that? If you were planning on making your payments in full, on time (as you probably should), then the relationship between your business and personal credit shouldn’t be an issue anyway. If anything, a healthy business credit card can help your personal credit standing. Still, if you’re adamant that your personal and business credit must be separate, there are more than enough lenders out there who won’t report your business activity. Of course, that’s assuming you keep up with payments!

Does My Business Credit Affect My Personal Credit

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