What Business Credit Cards Report To Credit Bureaus

Business Credit Cards Vs Personal Credit Cards

A business credit card and personal credit card operate in many similar ways. Both can offer bonus points, rewards points, introductory APR offers and a sign-up bonus, but there are a few distinct differences between how theyre regulated. That means there can be different terms and conditions for business cards and personal cards, and a savvy credit card shopper needs to understand those differences before they apply. First, lets review how business and personal credit cards are similar.

Obtain An Employer Identification Number From The Irs

Having a Federal Employer Identification Number will give your business certain privileges, like the ability to open business bank accounts.

You can apply for an EIN online for free through the IRS website.

A valid Taxpayer Identification Number is required to apply for an EIN. Valid TINs include Social Security numbers, Individual Taxpayer Identification Numbers , and EINs themselves.

Which Credit Cards Can Help Me Build Business Credit

Advertiser & Editorial Disclosure

Small business credit cards offer myriad benefits: rich rewards and cards with limits that are often higher than on personal cards. Plus, theres an added bonus that small business owners dont always recognize at first: A business credit card may help you build business credit.

In fact, getting one of these cards may help put your business on the map when it comes to building business credit, provided the card issuer reports information to commercial credit agencies. Not all cards have the same policy when it comes to reporting to business credit bureaus, though, and its important to understand how each one works.

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What Do Issuers Report To The Credit Bureaus

How does a business credit card affect your personal credit? It might depend on the credit card issuer.

Not all credit card issuers report the same information to the three major credit bureaus . Some issuers report all business card activity to the bureaus, which means that your business credit card could either have a positive or negative impact on your personal credit history and credit score. Other issuers only report business credit card information in case of default.

Heres the reporting policy for business credit cards by issuer:

How To Report To Dun & Bradstreet

Dun & Bradstreet offers several commercial credit report and score products, but its best known for its Paydex score. It has more than 12,000 trade partners around the world contributing more than 1.5 billion updates to trade information each year.

To get started reporting, you can contact your Dun & Bradstreet Relationship Manager, visit D& Bs website or call D& B at 844-201-9144.

Generally, you can report to Dun & Bradstreet if you become part of its Trade Exchange Program. There is no cost to report. You must have at least 300 active credit customers, or be a member of its DNBi or PPP service. You may be able to connect your Quickbooks account to make reporting easier.

As a bonus, youll get stickers you can put on your invoices that note you report to Dun & Bradstreet. They may give your customers the nudge they need to pay on time.

Learn more about Which Credit Cards Can Help You Build Business Credit

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How Do Business And Consumer Credit Cards Differ

While business and consumer credit cards often look and work in similar ways, there are distinct differences between the two. Here’s a rundown:

Small Business Credit Cards:

• Usually have higher credit limits than consumer cards
• Report activity to business credit bureaus rather than to consumer ones
• Bonus rewards rates, if offered, are often for business-related spending categories, such as office furniture and supplies, shipping, and digital advertising
• Sometimes provide 30-day trade terms
• May not have the same protections as consumer credit cards

Consumer Credit Cards:

• Can be used for either personal or business-related expenses
• Report activity to consumer credit bureaus
• Dont help build a credit history for your business
• Usually have lower credit limits than business cards
• Focus their best rewards on consumer expenditures, such as spending on groceries or gas

Be Wise About When You Use Your Card

Business credit cards can be a great way to pay for operating expenses. But if you need to finance inventory or equipment, it can be harder to pay that off quickly.

Whats more, you may qualify for a lower interest rate with a business loan or some other form of financing. Consider all of your options before you pick one.

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Who Should Get A Business Credit Card

Business credit cards are, as their name suggests, designed for small-business owners. While this certainly applies to someone operating a physical storefront, freelancers, contract workers, and all kinds of gig workers can qualify for and take advantage of business credit cards as well.

Business credit cards are helpful for small-business owners who want to:

How To Build Business Credit

There are two basic stages on the path to business credit:

If youve had a business for some time, you might already have credit files with the commercial credit bureaus. Its easy to check to see if a report exists for your business , although youll likely need to pay to see any details or credit scores.

Take note that the minimum prices mentioned above will provide the simplest credit reports available from each bureau. If youre investigating a business, these reports may not include the information you want. Check out the other options provided to see which one would be right for you. The more youre willing to pay, the more information and analysis youll get.

There are also some free services that will provide business credit data, although their reports may be pretty sparse. They usually wont show the same scores youll find on reports from the three business credit bureaus. In some cases you may just get a free trial, although you can usually pay to get more detailed results.

Depending on what youre looking for, you may be satisfied with one of these free services.

If you dont yet have a credit file established, thats OK its a pretty simple process.

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Which Business Credit Cards Do Not Report To Personal Credit

Most national banks including Chase, American Express, Bank of America, and Citi dont report your business credit card activity on a normal basis. But, both Chase and US Bank may report to the personal bureaus if your account becomes delinquent. This will cause your personal score to drop.

Capital One and Discover do report your monthly business credit activity to the personal bureaus.

However, all small business credit cards that require a personal guarantee have the ability to report your activity as often they desire. Thankfully, only Capital One and Discover are the most frequent reporting.

The best way to avoid having your business activity land on your personal file is to have a Brex credit card, one of the best credit cards for startups. You must be an organized business like an LLC, S-Corp, or C-Corp to qualify. And you will need an Employer Identification Number to apply. The Brex for Startups Card doesnt require a personal guarantee and applying doesnt impact your personal credit score. Everything only reports to the business credit bureaus.

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Cons Of Business Cards

• Potentially high interest rates: Business cards generally have higher fees and interest rates than personal credit cards.
• Can affect personal credit score: You may be personally liable for any unpaid debt on the cards, which can affect your personal credit score.
• Potential for misuse by employees: Larger organizations with multiple users listed on the account may have difficulty tracking down who made what purchase and verifying the business legitimacy of that purchase.

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Will The Business Credit Card Issuer Check Your Personal Credit Report

In most cases, a card issuer will check your personal credit report and score when you apply for a new business credit card. When this happens, a hard credit inquiry will show up on the credit report the card issuer checked, and the record will remain there for two years.

Hard inquiries may impact your FICO® Score for up to 12 months. However, inquiries typically dont have much weight where credit score calculation is concernedespecially when compared with more important s like payment history. A good rule of thumb with hard inquiries is this: You shouldnt be afraid to apply for new credit when you need it as long as you seek new credit excessively.

Apply For A Very Small Loan

Also known as a microloan, Accion Opportunity Fund or another microlender can provide you with affordable, flexible capital. These loans are easier to qualify for than those from other financial institutions, and your payments will be reported to the credit bureaus, helping you build credit going forward.

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Phase Two: Manage Your Account

Once youve opened your accounts, youll need to manage them the right way. If you dont, they might hurt your business credit instead of helping it.

To benefit from your new accounts, youll need to:

• Pay your bills on time never late. Some business credit scores are based 100% on payment history. Some scores even give bonus points for making payments early.
• Monitor your business credit reports and make sure your new accounts are added. If they dont show up within a few months, you may need to open additional accounts because the ones you have arent helping you build business credit.
• Pay your credit card balances off each month. Some business scores pay attention to your credit utilization ratio both on personal and business credit cards. If your credit reports show youre using a high percentage of your available credit limits, your business credit score might suffer. Even if a certain business scoring model doesnt care about credit utilization, its still a good idea to pay each credit card account in full every month to avoid expensive interest fees.

Ink Business Unlimited Credit Card: Best For Boosted Rewards

Why we picked it: Not only will you earn unlimited 1.5% cash back on every business purchase, but you can also transfer your rewards to a qualifying Chase Ultimate Rewards card and boost their value by 25% when you redeem for travel.

Pros: Chases Ink Business Unlimited touts a lot of competitive features for a no annual fee card. New cardholders can receive $750 bonus cash back if they spend $7,500 on purchases within their first three months. Enjoy unlimited 1.5% cash back on all business purchases, plus a 0% intro APR for 12 months on purchases .

Cons: Points are only worth 1 cent unless you transfer them to a premium Ultimate Rewards card. Some business credit cards offer a higher base rewards rate, such as The Blue Business® Plus Credit Card from American Express.

Who should apply? This no-annual-fee credit card is ideal for small business owners looking for a straightforward rewards card without complicated rotating categories and spending caps.

Who should skip? While this card is an excellent choice for racking up rewards on day-to-day spending, big spenders looking for outsized rewards rates on specific categories would be better served by another card.

Read our Ink Business Unlimited® Credit Card review or jump back to this cards offer details.

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Stage : Establishing Business Credit Files

Each credit bureau has its own requirements for the creation of business credit files. If you have a business but arent seeing a credit report, you might be missing a few of these key ingredients.

Here are a few basic steps you should take that will apply to all the bureaus, and one for Dun & Bradstreet in particular.

Questions To Ask Yourself When Choosing A Business Credit Card

If you want to earn rewards, simplify employee expenses and build credit, there are three main questions to ask yourself before opening a small business credit card account.

3 Questions to Ask Yourself

Which credit bureaus will my card issuer report to?How many employees need a company card?How much does my business spend?

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Wells Fargo Business Platinum Credit Card

The Wells Fargo Business Platinum Credit Card offers a choice between cash back or rewards points. Choose the cash back option and earn 1.5% cash back on qualifying purchases. Choose the rewards points option to earn 1 point on every $1 spent and receive 1,000 bonus points every billing cycle when you spend at least $1,000 on qualifying purchases. Theres no annual fee and a 0% introductory rate for the first nine months.

Note:

How To Use Business Gas Cards To Build Your Business Credit

By Joe Lawrence

After a call with a Business Credit Workshop student of mine several years ago, I compiled a list of business gas cards. Originally, I summarized the key points from the conversation and shared my findings here. At the time, the article was meant as a supplement for current students of the e-course. Ive since decided to provide even more information, make it public, and update this directory of credit-boosting business gas cards.

Here you will learn what a business gas card is and how it differs from a regular credit card, everything you need to know about using one, and how to select the best card for your company. Then, youll find a list of 11 cards to study including terms, rates, and rewards. Read all the way to the end for bonus advice about your application and payments.

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Think Carefully Before Making Large Business Purchases

Some small business owners get business credit cards so that they can earn rewards on everyday business purchases. Other business owners use their business credit cards to cover low cash flow months or fund large business purchases. While business credit card interest is tax-deductible, that doesnt mean its a good idea to carry a large balance on your business credit cardand it might not even be a good idea to put that big business purchase on plastic.

Why? Two reasons. First of all, putting a big purchase on a business credit card and paying it off over time ties up a lot of your available credit, which could have a negative effect on your credit score. Second of all, if youre at the point where you want to invest in your business but dont have the funds to cover the expense, a small business loan could offer better terms and interest rates. Consider all of your options before putting a large business purchase on your credit card, and be aware of the effect it might have on your credit.

Does A Business Card Affect Your Personal Credit Score

A business credit card can impact your personal credit score in a few key ways. Heres how:

New credit inquiry: If a business does not have sufficient credit history to qualify for a business credit card, the card issuer may require the business owner to provide a personal guarantee . In that case, the company will run a hard inquiry on your personal credit, and youll be personally responsible for the companys debts if the business cant pay them. That hard inquiry will likely be reported on your consumer credit report and could briefly ding your credit score. New credit inquiries account for 10% of your FICO score.

Even if you have an LLC or are incorporated, they might want you to put in your Social Security number as a personal guarantee, explains Nathan Grant, Senior Credit Industry Analyst at Credit Card Insider. Its still not going to be reporting the daily charges to your personal credit report, but if your account becomes delinquent, they need to have someone be liable, especially at first when the business has no credit history.

If your business credit card does report activity to the consumer credit bureaus, you should use some standard best practices to be sure your personal credit is protected. For example, aim to keep a low balance on your business card relative to the total limit .

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