Posted by Chuck on February 24, 2016
Consumer Credit

Published on February 24th, 2016 | by Chuck

77

All You Need to Know about Credit Reporting on Business Cards

In this post, we’ll discuss how business credit cards affect your credit report, and how banks will report the details of a business credit card on your credit report.

Background

When applying for a new credit card, the bank will check your credit report to determine credit worthiness. Even when applying for a business credit card using an EIN, your personal credit report is almost always used in making the decision, and this does result in a hard inquiry on the report.

Aside from the inquiry performed when applying for a credit card, the new account will soon show up on your credit report as an additional liability in your name. And, subsequently, the balances and payments of the card show up on the credit report as well.

  1. Inquiry hits your credit report
  2. New account appears on the report
  3. Monthly balances and payments appear on the report

A business credit card is associated with a business, and not fundamentally with the business owner personally. For that reason, some card issuers will not report the card as a liability on the business owner’s credit report, nor will any future balances and payments get reported there. A hard credit inquiry will take place with the initial application, but the account won’t appear on the credit report at all.

Below, we’ll break down which card issuers follow this practice of not reporting business cards.

It’s important to note that a delinquency from a business credit card will usually show up as a black mark on your personal credit report. The business card is tied to the business owner, and it’s his responsibility to pay off those debts.

Business Credit Report Vs. Personal Credit Report

Aside from the personal credit report of each individual, every business has a credit report that records the credit accounts connected with it. When applying for a business credit card, the business report is often referenced in the card approval process to augment information on the business. Things like size and age of the business can be gleaned from the report.

The business credit report is not typically used in the decision for approval since the data there is fuzzy and lacking. Even someone who doesn’t have any reporting on their business (e.g. a new business that’s applying for its first credit card) can get approved for a business credit card based on their personal credit worthiness. After getting a business card, most banks will report the new business and associated account to the business credit bureau, and a business credit report is thus established.

While most banks will report a business credit card on your business credit report, many will not report it on the all-important personal credit report (exact details below).

Even reporting on the business credit report is inconsistent, though. Some banks will report to all bureaus while others will only report to one. Amex officially says that they report business cards to the business, but from what I’ve heard, they don’t report at all to business bureaus (nor to personal bureaus as we’ll see below).

Why Reporting Matters

There are a few reasons it matters whether a business credit card is getting reported on your personal credit report.

  • A whopping 30% of your FICO score is based on your credit utilization. Only accounts and debts that are reported on the credit report will affect the score. (If you run up large balances, you may want to pay them down before the reporting date to help keep your credit score high, see Credit Utilization Reporting Dates For Each Card Issuer for exact dates when card issuers report your balance.) A business card won’t always get reported to the personal bureau and thus won’t affect the FICO score, no matter what balances you have, so long as you were never delinquent on a debt.
  • On a similar note, if you have large balances running through your credit cards, it could make a credit analyst nervous about extending credit. Whether it’s a loan, mortgage, or just a credit card that needs manual review, you’re better off keeping a ‘clean’ credit report, without high charges and payments readily apparent there. See also Can you REALLY Hide Manufactured Spend from your Credit Report?.
  • Lastly, many card issuers are hesitant to approve you for a new credit card if you’ve been gotten many new cards recently. Notably, Chase has a rule not to approve someone with more five new accounts that have been opened within the past 24-months. A business card won’t always get reported to the personal bureau and thus won’t affect your ability to sign up for new accounts. While business cards do result in a hard credit inquiry on your personal credit report, the credit account won’t appear, and a card issuer may be more willing to approve you for a new card.

Remember that each bank will always be able to see any business credit cards that they issued themselves, just they won’t see business cards issued by other banks on your personal report.

List by Card Issuer

Let’s take a look at the major U.S. credit card issuers, which banks report business cards to the personal credit bureaus and which don’t.

Amex

Amex does not report to the personal bureaus (1, 2, 3, 4, 5, 6, 7, 8). Both credit cards and charge cards do not get reported. (Canadian Amex does report.)

One report quotes Amex as saying they do report that information, but they’re probably just covering their bases with that, or else it was a miscommunication.

Bank of America

Bank of America does not report business cards to the personal bureaus (1, 2), and they are on record as saying this as well.

Barclay’s

Conflicting reports on Barclay’s: most report that Barclay’s business cards do not report to the credit report (1, 2, 3, 4, 5 and a friend), but some say they do (1, 2). [Maybe it depends on the card?]

Capital One

It’s known that Capital One DOES report business cards to the personal bureaus (1), and they are on record as saying this as well.

Chase

Chase does not report business cards to the personal bureaus (1, 2, 3, 4, 5, 6, 7, 8), and they are on record as saying this as well.

There have been reported cases of the business cards showing up, and you should be able to contact Chase and have them remove that. You can probably do this via secure message.

Citi

Citi does not report business cards to the personal bureaus (1, 2, 3, 4, 5, 6), and they are on record as saying this as well.

Discover

Discover does report business cards to the personal bureau (1, 2, 3). Not too many people have a Discover business card, though.

FNBO

Does not report your business cards to your personal bureau: 1

U.S. Bank

U.S. Bank does not report business cards to the personal bureaus (1, 2), and they are on record saying this as well.

Wells Fargo

Wells Fargo says that they don’t report business cards to the personal bureau. (1)

Corporate Credit Cards

For the employer

A business that is a legal corporation can apply for a corporate card using their EIN, and this account won’t show up on the business owner’s personal credit report.

Typically, to be eligible for a corporate card, the business will have to show three years of financial statements and also meet minimum expected transaction volume.

Check out Amex’s corporate card program here, Citi’s here, Chase’s here, and Capital One’s here. Some of them have rewards programs, some come with other types of benefits, and others focus on streamlining and tracking business expenses.

For the employee

How does a corporate credit card affect the employee who joins on the company account?

When an employee gets a corporate card, liability for the card usage is principally that of the corporation. While some card issuers disclaim that there may be an inquiry for the employee, this doesn’t usually happen in practice. The monthly balance and payment information would not be reflected on the employee’s credit report either. Note, however, that a delinquency will sometimes show up and ding the employee’s credit.

For further reading on corporate card’s effect on the employee, see this foxbusiness article, this business insider article, and this reddit thread.

Final Thoughts

When most of us apply for business cards, Citi, Amex, and Chase are arguably the most important, and those banks are known not to report business cards on the personal report. Capital One, on the other hand, does report business cards.

For those who charge up large balances on their credit cards, using a business credit card can be a way of keeping your FICO score high and your credit report clean. We do have to consider, however, the rewards potential of the business card versus a personal card.

See this post from Orensmoneysaver about how high balances due to reselling affected his credit score, and also this post from Moneymetagame about how churning, in general, affected his credit score.



77 Responses to All You Need to Know about Credit Reporting on Business Cards

  1. Rob says:

    How can we monitor our business credit? For personal credit I subscribe to experian and review it from time to time as well as claim my annual free credit report.

    • Chuck says:

      I don’t know of any free way. I think you can pay to get a copy.

      • naomi says:

        I maybe wrong but if you receive a denial letter, you should be able to get a free copy of the report the bank used to deny you. There should be a link or contact number on the letter.

        • Jon says:

          That only applies to personal credit cards. Business credit cards don’t have the same consumer protections. A bank could if they wanted, but they aren’t required.

    • K says:

      There are 3 business credit bureaus: DNB, Business Experian, and Paynet. You would have to contact them to request a report. You are not entitled to it and it is not cheap. The bank cannot provide you with the business report due to privacy agreements and if they violate them they can lose their contract with the business credit bureaus.

  2. Amanda says:

    Thanks so much! Do you know if any business card (specifically Chase ones) count in Chase’s 5/24 rule? Or authorized users on someone else’s business account?

  3. mike1 says:

    Hi DoC. Can you create a post explaining how these business credit cards report to business credit? I’ve heard from an expert these business cards don’t really do anything for my business credit score unless I have like 10+ business credit cards. On top of that, if I PG when I applied for these cards, I’d have a clean slate if I wanted to use a new EIN for my business and my current business score can’t be transferred over. Can you talk a little more about how business credit works? Thanks!

    • I’ll try to research this a bit more.

    • K says:

      Business credit cards don’t do anything for your business credit if you pay on time but they will destroy your business credit if you default. What appears on your business credit are payment histories on business loans and leases; commercial supplier accounts on terms; some business services like advertising, shipping services, and telecom; and suits, liens, and judgments.

      • Richard says:

        “Business credit cards don’t do anything for your business credit if you pay on time”

        That is false. They most certainly do a great deal for your business credit – IF they report to the BUSINESS Credit bureaus. The issue is that some of them report and some of them don’t. Amex small business cards to NOT report, so you will not build business credit using them. Chase INK business cards DO report, so you will build business credit using them. Just to give an example of two that I am aware of.

  4. Alex says:

    Thanks for writing this post… I am currently working on increasing my personal credit score in order to apply for 2-3 business credit cards. It is important for them NOT to show up under my personal credit and this information has definitely been helpful. I’m currently searching for information on what bureau(s) do these banks use when qualifying applicants for business credit cards. Do they use 1, 2, or all 3? Have you written anything on this subject? You guidance will be greatly appreciated. Thank You

  5. HG says:

    Will AUs on Cap1 biz accounts show up on THEIR personal CR?

    How is there not more than a rumor on Barclays Biz accounts. Surely someone out there must have a Barclays Biz and have gotten their personal CR…

    • Chuck says:

      Good question. I would guess Cap1 business AUs would show up on their CR, just like personal.

      I don’t have any Barclay’s business cards.

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  10. Ben says:

    Hi Doc,

    Do you know about FNBO? I’m thinking about the Best Western Business card. Does FNBO report business cards to personal credit reports?

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  15. bY says:

    I was just approved for the Jetblue Business card and was wondering if you ever received confirmation whether it shows up on your credit report. It looks like it is still uncertain from your write up above.

    Thanks,

  16. Sean says:

    Anyone know whether Citizens reports business cards as new accounts to personal credit?

  17. weedibix says:

    Barclays: reported US airways Business card as a new account to Transunion in 2011.

  18. Drew says:

    William,

    All data per TransUnion credit report paper copy in conjunction with Credit Karma. Applied for business cards with SS number.

    Amex Macy’s appears on credit report. Amex personal accounts are listed, some as closed and some open. Starwood Business, Delta Gold SkyMiles Business, and Blue Business do not show up.

    Barclay US Airways Dividend Business does not appear.

    Chase United Explorer Business and Ink Business Plus do not list on credit report.

    Citi AAdvantage Platinum Select Business does not appear.

    US Bank Club Carlson Business Card is absent from credit report.

    Can anyone verify if the Platinum Delta SkyMiles Business Credit Card is not reporting? Evidence points to Amex business not appearing on credit report. Considering getting, but want to to stay under 5/24 for Chase. The higher signup offer is appealing because of the once-per-lifetime rule.

  19. Ryan says:

    If credit card companies don’t report to the personal side then does the utilization ratio on the business cards only effect how that particular company perceives you? I know it’s often said to stay under a 30% utilization ratio but does that matter as much on a business card since it won’t effect your personal credit score (assuming you payoff your credit cards)?

    • Chuck says:

      It depends on the card issuer. Most business card issuers won’t affect your report, but Capital One does, as noted in this post.

      I don’t know if your business report gets somehow affected by balances on business cards, but we are primarily concerned with the personal report. (Business report might be used in some cases, but in more of a hazy way to get a picture of the business.)

      • ryan says:

        Chuck –

        Have you ever heard of the business utilization ratio being more lenient versus the personal utilization ratio? I imagine the view is that a business might need to use more of their credit on a month to month basis than an individual would. My biggest worry is maybe having a utilization ratio on my business cards of 50-60% and getting shutdown because of it. I know that 50-60% would probably look bad in the eyes of personal credit cards.

  20. robert says:

    How long after last applying for a personal card should I wait before I apply for a business card?

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  24. Fred Hovermann says:

    “Amex does not report to the personal bureaus.”

    Does this include Amex Business AU/Employee cards?

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  26. John says:

    If you close an amex business card will that hurt your personal credit?

    • Chuck says:

      I don’t think it hurts. (Closing personal cards doesn’t always hurt either, depending on circumstances.)

      • John says:

        If AMEX closed the account and you have a $0 balance, then would that also not make a difference? I think the BRAT team is doing work.

  27. Dave says:

    Hey.. any idea if I add an authorized user to a Chase business card, will that card show up in that authorized user’s personal credit report?

  28. David says:

    You can also check out this link http://bit.ly/2qR3Cay that gives your buy and sell signals, stop loss and take profit levels for each trade. You would be amazed at what this tool can do for you…

  29. Nick T. says:

    Lots of Chase cards say you are only eligible for a bonus once in a 24 month period. I have two separate businesses/business Chase cards and neither cards get reported to my personal credit report.

    I am wondering if it is possible to get two promotional bonuses with the two businesses (opening two Ink Business Preferred cards with 80,000 UR for example) as I have two logins, etc. Any experience with this?

  30. Rocel says:

    I’ve gotten Citi cards for Aadvantage bonus miles in the past, last one was last year Aug. for personal only. Will I get approved for the CitiBusiness Aadvantage card for the bonus points? And not get dinged for the 24 month rule?

  31. Zarovka says:

    I have Chase Ink Business Card and American Express Lowes Business Rewards. They each have 30K credit lines and I have been in good standing for years. The problem is that neither seem to be reporting my excellent behavior to any credit bureau. As a result, when I apply for a new card, I get very low (10K and less) credit lines that are pretty much useless to me regardless of whether I request a business card or a personal card.

    Based on the free reports I can get from the business credit bureaus, I appear to have moderate to poor credit due to no history, . I am hesitant to pay for the full report and find out what is in there because 1) the short summaries they provide suggest there is nothing in the reports and 2) there are several and it seems like I have to check all of them to find out what is going on.

    I have reviewed all three personal credit reports and none of them show my business credit cards.

    Is there one specific business credit bureau I really should pay to check for business credit card history? I have tried to call and write Chase and Amex to find out what they report to credit bureaus, but I suspect the answer is that they don’t report anything unless it is bad news.

    From what I have read on this site, the only way to deal with this is to challenge the low credit limit they give me. My first attempt, with the Barcley Ring Card, did not work but my plan is to try again with the Capital One business card and Chase Slate personal card I have requested.

    Anyone with experience dealing with this?

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  33. MarcoPolo says:

    Does Amex Business AU cards get reported ?
    I am assuming they are not reported since the primary card is not reported but just wanted to make sure before I request one since I am 4/24

  34. Tim says:

    Does closing a business card hurt your business credit score?

    I just closed my only business card (didn’t want the annual fee) but I’m wondering if maybe that will affect my chances of opening a new business card in the future?

    I checked and I’m not seeing the card on my personal credit report, but obviously I have no easy way of checking my business credit report, if such a thing even exists (I got the first card as a sole proprietorship).

  35. Mus says:

    So just to make sure. I am intending on applying for the CSR in 2019. If I were to open a business card with CITI, AMEX or BoA, it would NOT be reported on personal account? Therefore it would NOT be counted in Chases’ 5/24 rule correct? Please help me clarify this as this will affect if I’m looking to get the points on those said cards. Any help is appreciated!

  36. Steve says:

    Is this list still accurate? Did any of the banks change their rules?

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