Credit scores can be complicated, and it goes without saying that there are a lot of misconceptions about how they work. Everyone obviously wants the best score possible, and there are ways to help maximize that.
In writing about the increased welcome bonuses on the Delta SkyMiles credit cards — in particular the Delta SkyMiles® Gold American Express Card and Delta SkyMiles® Gold Business American Express Card — there have been a lot of questions about how credit scores show up on your personal credit report. So I figured I’d clarify a few things, in the form of some FAQs.
Does a business credit card application count as an inquiry on your personal credit score?
Yes, it does. A credit inquiry typically temporarily lowers your credit score by a couple of points, which isn’t a big deal. The inquiry generally falls off your credit report after 24 months. There are lots of other metrics of your credit score which can improve as a result of having more cards, like your credit utilization and payment history, which make up a much larger percentage of your credit score.
But for this there’s no differentiation between a personal card and a business card — a hard pull has the same impact, whether it’s from a personal or business card.
Does a business credit card otherwise count towards your personal credit score?
Generally not. That’s to say that paying on-time, keeping a low credit utilization, etc., on a business card, doesn’t count towards your personal credit score in the same way that doing that on a personal card would. In a way, you’re not being rewarded for good behavior on a business credit, which is unfortunate.
What about the Chase 5/24 rule?
This is where you potentially benefit by getting a business credit card. As most of you probably know, Chase has a policy on many of their cards where they won’t approve you if you’ve applied for more than five credit cards in the past 24 months. Business credit cards generally won’t count towards that total, at least business credit cards acquired through American Express and Citi, according to Doctor Of Credit.
Chase business cards would count towards that total since they’re processed directly by Chase.
But if you’re trying to avoid the Chase 5/24 rule, then applying for a business credit card with American Express, like the Delta SkyMiles® Gold Business American Express Card, is a great option.
There are pros and cons to many business credit cards not appearing on your personal credit score. The good news is that it doesn’t really hurt your chances of being approved for other cards, other than the number of inquiries. The bad news is that you don’t get the benefits of having your score potentially increase through good credit card habits, like low utilization, paying on-time, a long credit history, etc.
Still, perhaps most relevant is that applying for an Amex small business credit card, like the Delta SkyMiles® Gold Business American Express Card, won’t hurt your chances of being approved for another card under the Chase 5/24 rule.