You may not know it, but business credit isn’t just for small business owners and those who work for larger corporations. In fact, if you are self-employed, doing business under your own name or have a side hustle going that earns you extra money, business credit can be an option you shouldn’t ignore.

Business credit is important for several reasons. For starters, it’s a great way to keep your business finances separate from your personal expenses. Keeping your personal finances separate from your business simplifies things for accounting, borrowing and tax purposes.

However, business credit, while so valuable, is also just as vulnerable to cyberattacks as personal credit tools. So be sure to get a third-party credit monitor service for your valuable business credit finance options.

How a Business Credit Card Plays a Role in Business Credit

When it comes to establishing your business credit, obtaining a business credit card is essential. You should aim to use your business credit card just for business-related expenses. But, keep in mind, each credit card company has a different threshold for what information it requires for someone to get a small business card.

Here are 4 reasons you should consider adding a business credit card to your wallet:

• Business credit cards don’t sit on your personal report. When you first apply for a small-business credit card, the card issuer typically runs a hard inquiry on your personal credit reports. Other than this initial credit inquiry, the business line of credit sits separately from your personal credit line. So, your utilization ratio and other factors shouldn’t affect your personal credit score. If you run big balances through your business cards, it won’t negatively affect your personal credit score as long as you make your payments on time.
• Business credit cards help establish a business credit history. If your business takes off and you apply for loans for purchases, real estate or other large expenses, banks look at your business line of credit when determining your interest rate. The more established your line of credit, the better rates you’re likely to get.
• An established business credit history can also mean lower insurance rates. Insuring your business can be expensive. In some cases, higher business credit scores can help you keep rates low.
• Business credit cards give your business more spending power. Small-business credit cards often come with more spending power than personal credit cards. In part, that’s because limits are based on both personal income and business revenue, among other factors like creditworthiness.

As is the case with your personal credit, monitoring your business credit is of utmost important when it comes to building credit. It pays to monitor your business credit report for changes that can potentially affect your ability to obtain credit when you need it most.