Do You Get Credit Checked for a Company Credit Card?

Company credit cards help businesses manage operational expenses and streamline financial tracking. They separate business and personal expenditures, simplifying accounting and tax preparation. Businesses use them to improve cash flow and build a business credit profile, beneficial for future borrowing.

Understanding Company Credit Cards

Company credit cards come in various types. Corporate credit cards are for larger, established businesses. They feature higher credit limits and advanced expense management tools. Small business credit cards cater to smaller enterprises, including sole proprietorships, partnerships, and new LLCs. These cards commonly involve a combination of personal and business credit evaluation. Secured business credit cards offer another option for businesses with limited or no credit history. These cards require a cash deposit, which typically sets the credit limit and acts as collateral, making them easier to obtain.

When Personal Credit is Evaluated

Personal credit evaluation is common for many company credit cards, especially for smaller or newer businesses. Lenders often require a personal guarantee, making the applicant personally responsible for the debt if the business cannot repay it. This guarantee is necessary because new businesses may lack sufficient credit history or assets to qualify on their own. It ensures lenders have a repayment avenue, even if the business faces financial difficulties or ceases operations.

Sole proprietorships or partnerships inherently link personal and business finances, making a personal credit check almost universally required. Even for LLCs or corporations, a personal guarantee is common, especially if the business is newly established or has limited operating history and revenue. Lenders assess a personal credit report, including credit score, payment history, and debt-to-income ratio. A FICO score of 670 or higher is considered good and improves approval chances.

When Business Credit is Evaluated

Business credit refers to a company’s financial trustworthiness, distinct from personal credit. It reflects how a business manages financial obligations, including payment history with vendors, business loan activity, and public financial records. Establishing business credit involves obtaining an EIN, opening dedicated business bank accounts, and securing trade lines with suppliers who report payment activity to business credit bureaus. Consistent, on-time payments to suppliers and lenders contribute positively to a business’s credit profile.

Major business credit reporting agencies, such as Dun & Bradstreet, Experian Business, and Equifax Business, collect and maintain data. These bureaus compile reports including company information, public records like liens or bankruptcies, and payment histories. Lenders review these reports to assess creditworthiness, looking for strong payment history and responsible financial management. For established businesses, lenders may also request financial statements, such as balance sheets and income statements, along with annual revenue and existing business debt.

Applying for a Company Credit Card

Applying for a company credit card typically requires both business and personal information. Applicants provide the legal business name, physical address, industry type, and EIN. For sole proprietorships or businesses without an EIN, a personal SSN is often used as the tax identification. Annual business revenue and years in business are also commonly requested.

If a personal guarantee is required, the owner’s personal details, including their SSN, are necessary for a personal credit check. Applications can be submitted online or in person at a financial institution. Approval times vary, from a few minutes for automated decisions to several weeks if additional documentation or a manual review is needed. Applicants are notified of the decision via email or postal mail within a few days to two weeks.

Liability for Company Card Debt

Responsibility for company credit card debt depends on the card type and agreement terms. For corporate credit cards, used by larger entities, the business itself is solely liable for the debt. This means the company’s assets are at risk if the balance is not paid, not the personal assets of owners or employees. This arrangement provides a financial firewall between the business and personal finances.

For most small business credit cards, a personal guarantee makes the signer personally liable for the debt. If the business defaults, the issuer can pursue the individual’s personal assets, such as savings or property, to recover the outstanding balance. This personal liability applies even if the business is an LLC or corporation, as the personal guarantee supersedes limited liability protection for that debt. Authorized users are generally not liable; the primary account holder or guarantor bears responsibility.