A few weeks back I received an email from KAPED, a new fintech company that I'm on a waiting list for. They inadvertently sent a notice meant for existing clients to waiting list. I ended up in an email exchange with an executive there over this, but to not violate any privacy policies here I won't reveal any names.
The email pasted below greatly concerned me because at first I thought I had an credit card account with them because I mixed them up with CapitalOnTap. So I responded that I would close my account if they were going to report my business to personal. The executive responded that this was not their decision but a policy Equifax was implementing, to require all financial institutions to report all accounts with the business owners if they personally guarantee accounts.
This could seriously damage your personal credit score due to the potential overnight change to your credit utilization. And even if you have a low utilization rate on business, the age and number of the accounts you have could greatly harm your score if they're fairly new in the last couple of years. As most of you know that have gone credit sprees and get daily FICO updates, too many new accounts can drop your score 20-30 points or more in some cases.
While not a legal expert, this reeks of an anti-trust violation by using their powerful postion in finance to force reporting on personal credit for business expenses. Especially, if they're using it as a way to get financial institutions to comeback after their big hacking incident destroyed their reputation. They could use the data as a selling point, that they have hidden credit data on consumers no one else has.
"Good Afternoon,
I just wanted to make sure you're aware of the changes to our credit reporting to Equifax that will take place in 1 month from now, as of today all commercial accounts from KAPED that are reported to Equifax will be reported to their commercial and consumer reports. The KAPED One card will show up as a financial trade line "Commercial Card" for your commercial credit report and it will also show up on the guarantors personal credit report as a business credit card under a guaranty account with KAPED, Inc. as the creditor.
If you have any questions regarding this change, please reach out to me by responding to this email.
Sincerely,"
