The concept behind business credit is to finance a business, build credit without relying solely on your personal history and to protect your personal assets should the business fail. Business accounts are reported to business credit reporting agencies, which are separate from personal credit agencies, and FICO only uses personal credit information when determining scores. However, a business account may end up on your personal credit report and affect your FICO score depending on how the line of credit was opened.
Personal Guarantees
Business credit cards may show up on your credit report if you used your personal credit to get the loan or if you signed a personal guarantee as part of the application process. Even if the account does not show up on your credit report immediately, if it becomes delinquent and goes into collections it may end up on your credit report, particularly if an account goes to court and a judgment is made against you. A personal guarantee from the company owner is often required for small corporations or new businesses to get credit.
Corporate Accounts
Corporate cards may end up on your credit report if you agreed to liability under certain circumstances or signed a personal guarantee when you received the card. Leslie McFadden of Bankrate states that fraudulent use or mistreatment of a corporate card may result in personal credit reporting. Additionally, neglecting to file an expense report on the card may result in missed payments, which may reflect on your credit.
Spouse's Credit
In most cases, creditors may not ask about your marital status or use your spouse's credit when determining credit worthiness. However, if your spouse is tied to the business, you use your spouse's income when applying for credit or you live in a community property state, lenders may ask for spousal credit information.
Correcting Inaccurate Reporting
If a business credit card account appears on your credit report in error, you may take steps to remove it. Notify the credit-reporting agency of the error in writing. Include copies of any documents proving your case. The agency will investigate your claim and notify you of its findings. If the investigation does not go in your favor, contact the lender with proof that its claim is inaccurate. Creditors may not report inaccurate information again. If they question your claim, any additional reports made to credit reporting agencies on the account must include a note showing that you dispute the item.
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