Can I get a business credit card with bad credit?

It is tricker to get a business card with bad credit because some lenders check your personal credit score as well as your business credit score – especially if you have a new or small business. However, there are companies who offer business credit cards for people with bad credit.

6 min read
Woman in a cafe, holding a credit card and looking at her laptop

How do business credit cards for bad credit work? 

Business credit cards work in the same way as personal credit cards, with a few key differences:

  1. you must own a business or be a stakeholder in a business to get one
  2. business credit cards are designed for business use only
  3. business credit cards have specific features, like additional cards for employees, expense tracking and customisable spending limits

What is a bad credit score? 

Your credit score gives lenders an indication of how creditworthy you are, based on how well you’ve managed your finances in the past. A low credit score indicates that either you haven’t taken out credit before, or you may have the following showing on your credit report:

  • missed or late payments
  • defaults
  • County Court Judgements (CCJs), bankruptcy or Individual Voluntary Arrangements (IVA)
  • multiple applications for credit made in a short space of time
  • balances over 30% of your available credit limit (across all of your credit cards and overdrafts combined)

Do you get credit checked for a company credit card? 

Whether you get credit checked for a company credit card depends on the lender’s requirements and whether you’re the primary card holder.

If you are the main account holder for a small or new business without much of a credit history, the lender is likely to run a credit check on your personal credit report to see how responsible you are with money. They are also likely to ask you to sign a personal guarantee promising to pay the balance on the card out of your own pocket if the business fails to pay.

If you are an employee looking to use a small business credit card, it’s less likely that lenders will check your credit – but not impossible.

What credit score is needed? 

There is no set credit score that you need to aim for to get accepted for a business credit card. Each lender uses different criteria (and they don’t just look at your credit score). So, you may be accepted by one and declined with another. Having said that, the higher your credit score is, the more chance you have of being approved. This is because you’ll seem less of a risk to lend to.

If you have bad credit, your options may be limited, and you might struggle to access the best interest rates. So, you may want to build up your credit score before applying – or research lenders who specialise in lending to those with bad credit.

Read on for our top seven tips for boosting your credit score.

Why should I get a bad credit business credit card? 

There are several reasons why you may consider getting a business credit card, such as:

  • you can easily track the cost of business purchases and expenses, which is useful for tax purposes
  • if you manage the card well, your business’s credit rating will improve, which may help you to access better finance deals in the future
  • some cards come with rewards (though these may be harder to get with bad credit)
  • you can add employees as additional cardholders

What else do I need to consider? 

Before applying, consider the following points:

  • missed or late payments can impact your business credit score (and personal credit score if you’ve signed a personal guarantee) - and incur late fines
  • large purchases that you can’t afford to pay back could have a negative effect on your business
  • using your business credit card for personal costs could cause confusion with your business finances
  • it’s possible that employees who have access to your card may make unauthorised purchases with it

How to get a business credit card with bad credit 

Follow these five steps to maximise your chances of being accepted for a business credit card.

1. Do your research

You’ll find it difficult to access the best interest rates and highest credit limits while you have bad credit. So, you’ll need to research your options thoroughly to find the right deal for you.

2. Check your eligibility

Use a business credit card eligibility checker to see whether it’s probable that you’ll be accepted – before you apply. It doesn’t affect your credit score or appear on your credit report for lenders to see.

3. You might be asked to sign a personal guarantee

You may be asked for a personal guarantee on your business credit card, especially if your business is small or new. If this is the case, the lender will take your personal credit history into account when making their decision, so you may want to work on building up your credit score first.

4. Get your credit report in shape

You can do this by making sure you afford to pay your outgoings on time every month. There are some quick fixes you can do, like registering on the electoral roll or putting all your bills on a direct debit in your name (as long as you pay on time, every time). It may also be an idea to reduce any current debt as much as possible before applying to take out more.

5. Don’t apply for lots of cards at once

Your credit score dips every time you apply for credit, so don’t apply for lots of business credit cards at once.

Alternative solutions to business credit cards 

If a business credit card isn’t right for you, you could consider these alternative options:

  • prepaid card – a prepaid business card can be loaded with money and used to make purchases or draw cash from an ATM
  • business charge card – you don’t have a spend limit, but you must pay off the balance in full each month
  • business loan – you get a lump sum of cash and then pay it back in monthly instalments (including interest)