Does a Company Credit Card Affect My Credit Score?

Whether you work at a large company and you’ve been given a credit card or you have your own small business and have opened a credit card, you might be wondering whether having a company or business credit card affects your credit score? We will answer this question in much detail below.

Does a Company Credit Card Affect Your Credit Score?

A company credit card can affect your credit score if you are the primary account holder on a small business credit card because small business credit cards typically require a personal guarantee, causing them to appear on your credit report and affect your credit score. Additionally, if you are an authorized user on a small business credit card, the credit card can also affect your credit score. However, if you work with a large company and have a corporate credit card issued in your name, the credit card is unlikely to affect your credit score as the account status is only reported on the corporate company’s credit file and not your personal credit file.

So, if you have a small business and you’re the primary cardholder or an authorized user, the credit card will appear on your credit report and will impact your credit score. So, be careful how you use the credit card and make sure to make all of your payments on the card in time to ensure that the card does not negatively affect your credit score.

If you’re unsure as to whether a company credit card affects your credit score, you should pull a copy of your credit report and review it. If the account appears on your credit report, this means that the credit card will affects your credit score, so use it responsibly.

Even though you’re not using your business credit card for personal expenses and the account has your business name on it, if it appears on your credit report, it will have an effect on your credit score just as would a personal credit card. So, if you make late payments, the late payments will appear on your credit report and they will have an impact on your credit score.

On the other hand, if you use your company credit card responsibly, make your payments on time, and keep your credit card balance low, these things will improve your credit score. However, if you miss payments and carry a high balance, this will lower your credit score.

This applies to the primary account holder and any authorized users on the account. For authorized users, if the primary account holder manages the account responsibly, makes payments on time, and keeps a low balance, this will help your credit score.

So, even if you’re just an authorized user, you should ensure that the primary account holder responsibly uses the account because you’re credit will be affected just as would the primary cardholder’s credit.

Did The Card Issuer Check Your Credit Report When You Got Your Company Card?

When a small business borrower applies for a small business credit card, the card issuer will almost always check the primary cardholder’s credit report before issuing them a credit card. This allows the card issuer to examine the person’s credit report to determine whether the person is creditworthy enough to be approved for the credit card. However, if you’re an employee of a small business and a small business owner wants to add you to the company credit card, the card issuer will likely not check your credit report. Only the primary account holder’s credit report is reviewed prior to the card issuer opening the account. If you’re uncertain as to whether your company card affects your credit score, you should review all three of your credit reports to determine whether it will impact your credit. If the account appears on your credit report, it will affect your credit score.

How to Avoid A Negative Impact On Your Credit Report?

If you have a small business credit card and you want to avoid the credit card from having a negative impact on your credit report, you should make sure to make all of your payments on time and keep your credit utilization (how much of your available credit you’re using) at 10% or below and never to exceed 30%. Use the card just as you would your personal credit card because if you’re the primary cardholder or an authorized user it will affect your credit just as would your personal credit card.

Also, to keep your account in good standing, you should periodically login into your online banking dashboard and check to see if someone else used or account or if there is unauthorized activity on your account. This ensures that no one else is misusing your account. Also, if you’re not already in the habit of reviewing your credit report on a monthly basis, you should. This ensures that no one else has opened accounts in your name and that nothing negative that does not belong to you hurts your credit score.

Bottom Line

So, if you were wondering whether a company credit card affects your credit score, now you know that it all depends on the type of card that you have. If you have a small business credit card, the card will most probably affect your credit score because the status of such accounts is usually reported to the credit reporting bureaus just as would a regular personal credit card. Also, if your employer is a small business owner and he or she adds you as an authorized user on a small business credit card, this will affect your credit score the same way being added as an authorized user on a personal credit card affects your credit. That said, if you’ve been added to a large corporation’s credit card, chances are that it will not affect your credit score because the account status is only reported as part of the organization’s credit file and not your personal credit file. If you have any general questions or comments, please feel free to leave them in the comments section below.

Frequently Asked Questions (FAQs)

1. Do business credit cards affect your credit score?

If you are a small business owner and you open a small business credit card for your business, you are essentially making a guarantee to being held responsible for the debt on the card. So, if you have a small business credit card, your account status is likely going to be reported on your credit report, and the card will therefore have an impact on your credit score.

2. Can you be declined a company credit card?

Yes, you can be declined a company credit card. That said, corporate credit cards are easy to obtain as most corporate card issuers will not check your credit in the initial application process.

3. Is it illegal to use a company credit card for personal use?

Not necessarily. You can use a company credit card as agreed upon between you and your employer. Also, if you own the business, you are permitted to make personal purchases on your credit card account as there are no laws that prohibit a person from using a company credit card to make personal purchases. There may be some tax implications, but other than that the practice is permitted.

4. Does a business account affect personal credit?

Yes, a small business credit card account can affect your personal credit and credit score. So, review your credit report to determine whether the account is reported on your credit report and affecting your credit score.