More and more small businesses are using corporate credit cards. It is a great way to keep track of expenditures, and many issue these cards to individuals within the company to cover expenses such as travel, marketing, etc. While this card shows your name on the front of the card, usually along with the business name, does that mean it is showing up on your credit report?
The short answer is maybe. Whether a corporate card is or isn't being reported to your credit, is influenced by two factors: how the card was set up and the card issuer's reporting policies and these factors can vary from card to card and business to business. American Express is arguably the biggest provider of corporate cards, and typically don't report such accounts on an individual's credit file as long as the card member (actual business owner) fulfills their cardholder responsibilities (paying account balances in a timely manner, for example). However if the business owner fails to make payments on a company issued credit card, the delinquencies (along with balance and age of account information) will be reported to the credit bureaus and may affect your personal credit report
Here are a few things to remember when dealing with corporate cards:
- If your company requires that you maintain a corporate card, you should first ask whether you are personally responsible for the debt and whether the credit account will be reported on your credit file. Also, ask if a credit bureau report inquiry will be pulled on you as part of the card setup process when the company first provides you with the card. The H.R. department should be able to address these questions or provide a contact for the card issuer who can.
- If you currently have a corporate card and want to know whether or not it is reported, you can ask your H.R. department, call the issuer of the corporate card, or simply obtain a copy of your credit report to check for yourself.
- Whether the card is being reported on you or not, it is good practice to submit expense reports in a timely manner (especially if you are on the hook to pay the monthly bill!) and make payments as agreed. Note that the corporate card issuer may not report such cards to the credit bureau as long as they are in good standing. They may, however, opt to report if payments are severely past due (90 days or later, for example).
- If you terminate employment and have a corporate card, make sure all outstanding expense reports are completed, the outstanding balance has been paid in full, and the account is closed.
These actions will help you most effectively reduce the possibility of surprises down the road.
