What's the difference between business credit and personal credit?

Your business credit and personal credit are not all that different. Business credit is based on your business's financial history and is tied to your business's EIN number, while personal credit is based on your personal spending history and is tied to your Social Security number.

Even though creditors today tend to move away from relying on personal credit alone when judging the financial health of a business, your personal credit history will still factor into your approval and credit limit when you apply for business credit.

That is because most business credit cards require the business owner to personally guarantee the debt, so if the balance isn’t paid off the owner will be liable.

This also means that the business account activity may show up on the owner’s personal credit reports. Depending on each card issuer’s policy, it may show up only if the owner defaults, or all activity may be reported.

You can learn more from WalletHub’s latest Business Credit Card Study.