Closing a business card while preserving your credit score

Your Business Credit columnist Elaine Pofeldt
Elaine Pofeldt is a journalist whose articles on entrepreneurship and careers have appeared in Fortune, Working Mother, Money and many other publications. She is a former senior editor at Fortune Small Business magazine and an entrepreneur herself, as co-founder of, a website for independent professionals. She writes "Your Business Credit," a weekly column about small business and credit, for

Ask a question.

Question Dear Your Business Credit,
How do you close a business credit card after you sell your business without hurting your credit? -- Barbara

Answer Dear Barbara,
A business credit card affects your personal credit score, but not to the extent a personal card does, as I discussed in a previous column: "Keeping business credit off your personal record." Not all business card issuers report activity on these cards to credit bureaus to use in calculating your personal credit score.

As a result, closing the card may not have the same detrimental effect on your overall credit utilization ratio as closing a personal card could. Credit utilization is the percentage of your available credit you are using. As you may know, when you have a high credit utilization ratio, it can lower your credit score. By closing a credit card, you can increase your credit utilization and hurt your credit score. Your existing debt will become a larger portion of your total available credit. 

The best way to find out if your card issuer reports on your business card usage to personal credit bureaus is to call the customer service number and ask. Assuming your issuer does report to the credit bureaus, you'll want to make sure your overall credit utilization stays the same once you close the business card. There are several ways you can do that. One is to apply for a new card and not use it or use it very little. If the credit limit is similar to that of your business card, that should help you keep credit utilization the same.

Another way to maintain your current credit utilization ratio is to pay down the balances on your other existing cards, if you have any. That may be easier said than done, but since you are in the position to close one card, I'll assume this is an option for you. Focus on paying down the card that is nearest to the limit first, because your utilization of individual cards affects your score. 

If you want some added assurance your credit score won't dip, you can take extra steps to bolster your credit score. During months when you have a big, unexpected expense such as a car repair that puts you near your credit limit, make an extra payment midway through the month to pay it down. Also make sure you stay on time with your payments on other cards. Automate payments if possible.

Finally, check your credit reports with the major credit bureaus -- Experian, TransUnion and Equifax -- and report any errors. You can get one free report from each bureau every year at

See related: Business and personal expenses better on separate cards

Meet's reader Q&A experts

Does a personal finance problem have you worried? Monday through Saturday,'s Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.

Join the discussion
We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

If you are commenting using a Facebook account, your profile information may be displayed with your comment depending on your privacy settings. By leaving the 'Post to Facebook' box selected, your comment will be published to your Facebook profile in addition to the space below.

The editorial content on is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company's business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.

Weekly newsletter
Get the latest news, advice, articles and tips delivered to your inbox. It's FREE.

Updated: 02-18-2019