Do business credit cards check personal credit?

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Cameron DiGiovanni, Writer

@cdigiovanni20 • 03/04/21 This answer was first published on 03/04/21. For the most current information about a financial product, you should always check and confirm accuracy with the offering financial institution. Editorial and user-generated content is not provided, reviewed or endorsed by any company.

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Yes. Most business credit cards check personal credit. Banks and credit unions usually check business credit card applicants’ personal credit history because almost all business credit cards require a personal guarantee, meaning the cardholder is liable for any balance the business can’t pay. Business credit card issuers need to know that applicants can handle this responsibility, which explains why applicants will see a hard credit inquiry on their personal credit report.

While it is possible to get a business card that doesn’t require a personal guarantee, and therefore does not check your personal credit, this shouldn’t be how you decide which business credit card to get. Apply instead for the best card you can qualify for, with rewards, rates and fees that suit the financial needs of your business.

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What are some of the business credit cards that don't report to personal credit bureaus?

There are some business credit card issuers that will not report small-business credit card activity to consumer credit bureaus: Bank of America, BBVA, Citi and Wells Fargo. The rest may report negative information only if your account is seriously delinquent.

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.… read full answer

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.

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