How does my business credit card impact my personal credit score?

The intersection of personal and business credit is an interesting one — particularly for small-business owners who are just getting off the ground. Before opening a business credit card, many business owners may wonder whether a business credit card affects their personal credit and how. The fact is, total separation between your business and personal credit score is often not possible.

The specific ways your business credit cards interact with your personal credit vary depending on factors like the type of business card, whether your business card issuer reports your card to consumer credit reporting agencies, your payment history and other financial habits.

How do business credit cards affect your personal credit?

From the moment you open a business credit card, you can start building your business credit — a separate score unique to your business accounts. Much like your personal score, your business credit score rises and falls according to the length of your credit history, credit utilization, payment history and other factors determined by the business credit reporting agencies.

Unlike personal scores, however, business scores can be accessed by anybody without the consent of the business. How the scores are graded also differs, with most business scores reported on a 1 to 100 scale, while personal scores fall between 300 and 850.

Certain activities on some business cards affect both personal and business credit scores, while others will influence your business score alone. Additionally, business credit cards can appear on your personal credit report. This makes it important to comb through the details of every business card agreement. That way, you’ll know where your activity will be reported and how much influence it might have on your personal credit.

New credit inquiries

Applying for your first business card often requires a hard inquiry into your personal credit history. With nowhere else to draw from, potential lenders may look at anything you’ve used to prove yourself as a worthy (or unworthy) borrower — personal credit being the most obvious source.

Since hard inquiries put a small dent in your credit score, expect a slight dip. As long as nothing else changes much, your score should get back to where it was within a year or less — although the hard inquiry could stay on your credit report for up to two years.

Credit utilization

Some issuers factor your business card into your personal utilization ratio, while others don’t.

Your credit utilization ratio is the total amount of credit you’re putting to use compared to the total amount of available credit you have across all lines of credit. Say you have three credit cards, each with a $5,000 limit, totaling $15,000 in available credit. If you have a $3,000 total balance across those three cards, your utilization ratio would be 20 percent.

Make sure you know what you’re dealing with. Business cards with higher limits can more heavily influence the math that goes into your credit utilization ratio. If you’re putting large expenditures on your business card — and your business card issuer reports to your consumer profile — it could throw off your ratio. A rule of thumb is to keep your credit utilization ratio below 30 percent.

Payment history

Much like with a personal credit card, your payment history is arguably the most important contributing factor to a strong business credit score. However, not all issuers report both on-time and late business card payments to the credit bureaus. Some issuers will report that information, others will only report negative information. For example, American Express only reports negative business card info, while Bank of America doesn’t report business card activity to personal bureaus at all.

Check with your credit card company to understand how and where they report your business payment information.

Personal guarantees

For small businesses, issuers will typically make you sign a personal guarantee for a business card. A personal guarantee promises that if you fail to pay your debts on your business card, you — as an individual — are still on the hook. That gives your lender the right to go after your personal assets — all credit lines included.

You can find a few business credit cards with no personal guarantee. Corporate cards often fall into this category as well. As time goes on and your business builds a credit history of its own, your personal credit may become less important. However, the guarantee may remain.

Personal credit reporting

If an issuer reports your business credit card activity on your personal credit report, it will appear as just another credit card on your report. However, the information it reports could differ from what it reports related to your personal credit cards.

In the case that an issuer does report your business card information to consumer bureaus, credit scoring models will factor that information into your credit score just as your personal information is considered. For instance, the payment history from your business credit card will impact your personal credit score similar to how the payment history for your personal credit cards will impact it.

Issuer policies for business credit card activity

Whether an issuer reports your business card information to the credit bureaus varies. It’s best to confirm with your issuer as policies can change at any time, but here is where major issuers stand as of publishing.

Employee cards

Yes, employee card purchases can affect your credit. As is the case with any authorized user situation, the primary accountholder is ultimately responsible for any purchases made on the account, whether you make them yourself or your employee does so as an authorized user. That means that an employee running up charges on your business card could ding your credit if you can’t pay the bill.

Being the authorized user on a small-business card also carries the same benefits and risks of being an authorized user on a personal credit card.

If the primary accountholder has a solid credit history and responsibly handles the business credit card account, the authorized user could see a positive impact on their credit history. Likewise, if the business credit card account falls into default, the authorized user could see a negative impact.

Corporate credit cards, however, don’t generally appear on personal credit reports and shouldn’t have an impact on your personal credit. This is true for both the primary accountholder and any employees on the corporate account.

Should you get a business credit card?

Whether you should get a business credit card depends on your goals, the financial status of your business and your personal financial habits.

When to get a business credit card

Choosing a business credit card is a great option for small- business owners who want to:

• Spread the costs of their large purchases out over time
• Take advantage of business credit cards’ higher credit limits
• Cover costs during seasons of low cash flow
• Earn rewards on expenses
• Provide employees with their own credit cards

More than anything, this is a reminder to stay aware of how closely intertwined your personal and business credit accounts can be.

When not to get a business credit card

While there are advantages to having a business credit card, it won’t absolve you of any negative credit history you may have with your personal cards. A business credit card might make your financial situation worse if you’re struggling to:

• Keep your spending within your limits
• Pay your card balances on time
• Shave down your debts from other cards or loans
• Keep your personal credit score from falling

You should instead work on building good credit habits and raising your personal credit score. You can also look into small business loans as an alternative to credit cards.

The bottom line

If you decide applying for a small-business credit card is the right step for your growing business, it’s important to understand how that may affect your personal credit history. By prioritizing on-time payments and maintaining a low credit utilization ratio, you’ll be on your way to building strong business credit while protecting your personal credit at the same time.

The Bank of America content in this post was last updated on February 10, 2025.