Your Business Credit

Shady business partner opens up credit in your name

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

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QuestionDear Your Business Credit,
I was informed by American Express that my business credit card had been suspended due to charges on another account that I knew nothing about. There are $10,000 in charges on the card, and the card is delinquent. I suspect my business partner took out a credit card in my name without my knowledge, and had been using it for personal expenses. When I confronted my partner, he blamed it on an “associate” of his. The associate has agreed to pay the past due amount, next week, but claims all the charges are not his.

My partner has access to my personal information and has done questionable things with my credit in the past, so I highly suspect he’s involved. How do I keep this debt from harming my personal credit? I have excellent credit and do not want it ruined.

If my partner is involved, filing a fraud report would be difficult, as it would harm the business. Also, I have learned business credit cards don’t necessarily show up on business credit reports. For example, neither my business AmEx or the fraudulent AmEx card shows up when I run a credit check on the company.

How do I find out what other credit may have taken out in the business name, and if my name was fraudulently used as guarantor? If this information does not appear on a business credit report, how does a business that is victim to identity theft find out this information? – Chuck

AnswerDear Chuck,
What a mess. I’m really sorry to hear you have to deal with this.

If you were listed as the guarantor for a credit account, then that account should appear on either your personal or business credit reports. Credit guaranteed by someone else – such as your partner or his “associate” – would appear on that individual’s credit reports. If credit were taken out in the business’s name, it should appear on the business’s credit reports.

You didn’t mention what type of American Express card was opened fraudulently, so I am not sure in this case if it would appear on a business or personal credit report. It may not have appeared on the company’s business credit report if it was a personal card. Your AmEx business card was probably tied to your personal credit, so having a delinquent debt on a personal card could affect your business credit.

Generally in this situation, I would recommend filing a fraud alert with the three major credit reporting agencies – Experian, Equifax or TransUnion – and let them know one of your credit accounts has been compromised. From that point on, lenders must take extra steps to check that any requests for new credit made in your name came from you, and not a fraudster.

Although you are reluctant to do that, it would prevent your partner from opening additional credit in your name and should free you from the responsibility for the $10,000 debt, so it is worth reconsidering.

What if you really can’t bring yourself to file a fraud alert? You are still entitled to a free credit report from each of the major bureaus each year. (See “Free credit reports: How to get the actual free one.”) I’d check those over down to each nitpicky detail to make sure there are no accounts you don’t recognize on them. I’d also request business credit reports from the major bureaus, as well as a report from D&B, which provides credit scores for businesses. Between all of those reports, it seems likely that you would be able to uncover any accounts for which you are the guarantor or that were made in the name of the business.

Of course, there’s a bigger issue here. Your business partner does not seem trustworthy. Staying in a partnership with someone engaged in questionable business activities doesn’t seem to have any advantages to it and could ultimately damage your reputation. I’d suggest you look for a way to cut your ties now and get off to a fresh start – on your own.

See related:What merchants should do when they suspect card fraud

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