Many different types of accounts will contribute to your business credit history so long as they report to the commercial credit bureaus. These can include:
- Vendor accounts
- Supplier trade lines
- Business credit cards
- Business credit lines
- Business loans
Similar to building personal credit, the most important part of building business credit is paying your bills on time. It's also a good idea to keep your credit utilization low. This is a measure of how much of your available credit you're using. Low utilization means you're staying on top of your balances and aren't taking on too much debt.
Do business credit cards require a personal credit check?
Yes, small business credit cards absolutely require a personal credit check. This is because you will be required to personally guarantee the credit line.
If your business can't pay its credit card balance, you'll still be personally responsible for paying the debt. Even if you close your business, you need to pay the full balance on your business credit card. Defaulting on a business card will hurt your personal credit the same as if you stopped paying a personal credit card.
Small business credit cards vs. corporate credit cards
There is one exception to the personal guarantee requirement: corporate credit cards. Corporate cards are not tied to your personal credit in any way. They don't require a personal credit check and they have no personal guarantee.
While this sounds ideal, there are a few drawbacks to corporate cards:
- You need a specific business structure. Only LLCs and corporations can qualify for a corporate credit card. Sole proprietors and partnerships are not typically eligible.
- You need a lot of revenue. The majority of corporate credit cards require your company to have an annual revenue in the millions. (One exception to this rule is the Brex Card, but it must be paid daily.)
Business cards for owners with good personal credit
While a personal credit check for a business card can be inconvenient, there are upsides, too. In particular, it means you can get a business credit card without any business credit history at all.
In fact, even if your business is brand new, you can qualify for most business credit cards as long as your personal credit is in good shape. This includes many of the top-rated small business credit cards:
Most of the top business cards require good to excellent personal credit. On the FICO® Score scale -- the most commonly used metric -- this means a score of 670 or higher (higher is better). Beyond a high score, your credit profile should show:
- No late payments
- Low credit card balances
- A long credit history
- A diverse credit mix
LEARN MORE: The Complete Guide to Understanding Your Credit Score
Can you get a business credit card with a low credit score?
If your personal credit score is low, getting any kind of credit card can be a challenge -- especially business credit cards. However, you may still have a few options if you have bad credit:
- Corporate credit cards: As covered above, corporate credit cards aren't associated with your personal credit at all. Only certain businesses can qualify for a corporate credit card.
- Secured business cards: A secured business credit card is one that uses a refundable cash deposit to secure the credit line. This deposit usually sets your credit limit. If you pay on time every month and keep your balances low, you can build business credit over time.
- Secured personal cards: Secured consumer cards are the same as secured business cards. They use a cash deposit to secure the credit line in case you default. Once you build credit, you may be automatically upgraded to an unsecured account. Secured card deposits are refundable as long as your account stays current.
LEARN MORE: What Is a Secured Credit Card?
Do business credit cards report to the consumer credit bureaus?
Some credit card issuers report business card data to the consumer credit bureaus -- but most don't. The companies that are reported to regularly report to both commercial and consumer bureaus include:
Barclays is said to report sometimes, but not always. The major card issuers that reportedly do not report regular business card usage data to consumer bureaus usage includes:
Keep in mind that this refers only to your regular usage, such as your payment history and monthly balances. If you become delinquent on your business card account -- i.e., you become more than 60 days late -- most issuers will report the past-due account to the consumer bureaus.
RELATED: Check out Motley Fool Money's guide to the best banks for small businesses.
