Business credit can affect personal credit, but how much of an impact it has depends on the credit card issuer. A little more than half of all major credit card issuers report business credit card information to consumer credit bureaus, according to WalletHub research. But they all handle business credit reporting a little differently.
Capital One and TD Bank regularly report business credit card information to both consumer and commercial credit bureaus.
American Express only reports negative information about business credit cards to consumer bureaus, and reports all information to commercial bureaus.
Chase and Discover only report information to consumer bureaus if the account becomes seriously delinquent.
Bank of America, Citibank, Barclays, and Wells Fargo only report business credit information to commercial bureaus, leaving consumer bureaus out of the loop.
At this point, it’s important to note that business credit scores and personal credit scores are compiled in different ways, using information from different credit bureaus (or at least separate divisions within a bureau). For example, Experian and Equifax both have business and consumer wings, but information isn’t shared between business and consumer files.
Nevertheless, there is a fundamental connection between business credit and personal credit scores. Most business credit cards require a personal guarantee, which means the primary cardholder will be personally liable for any debts incurred by the business. That’s the real reason why business credit affects personal credit to begin with. A business credit card user’s personal finances are relevant when it comes to an issuer’s ability to collect repayment for any future balance. As a result, most business credit cards ask for both an EIN and a Social Security number in order to assess both an applicant’s personal and corporate credit histories during the application process. And that, in turn, explains why applying for nearly any business credit card will put a hard inquiry on your personal credit report.
That said, having a business credit card that affects your personal credit report can also be a good thing, if you use the card responsibly. If your business credit card issuer reports all information to your personal credit report, it can help your score to have the positive information reported on a regular basis.