As an employee, a corporate credit card lets you avoid entangling business expenses required by your employer and personal expenses, but it can still affect your credit rating. In general, business credit cards usually have a negligible effect on your personal credit rating. However, even if your employer is responsible for paying your business credit card debt, an unpaid bill can cause damage to your credit rating.
Business Credit Card Basics
Most likely, you have to apply for a business credit card jointly with your company. An initial inquiry can cause up to 5 points in damage, but the credit card provider may or may not report the payment history to the credit reporting bureaus. American Express, the largest provider of business credit card lines to Fortune 500 companies in the U.S., does not report account history to the credit bureaus. Other lenders, such as the issuers of MasterCard or Visa, may report history to the bureaus. Positive payments improve your credit rating, but late payments damage your score even if the company guarantees the bill, if the creditor reports the account's monthly payment history to the credit bureaus, according to Ismat Sarah Mangla on the CNNMoney website.
Exception
Your credit card provider may have special policies on your account. For example, American Express reports delinquent debt to the credit bureaus if the account is 180 days or more late, regardless of who is supposed to pay the bill. The only way to know for sure what happens is to review your employer's credit card policy and that of the lender.
Prevention
Review your credit history via AnnualCreditReport.com and look for the corporate account to determine conclusively if it affects your credit. You and your employer should receive a bill from the credit card provider. Confirm with the company's accounting department that the company pays the bill by the due date. File an expense report as soon as possible with the company's accountant so that your employer can approve the expenses and pay the bill as soon as possible, suggests Janna Herron of Bankrate.com.
Considerations
Know what expenses your company will pay. If you make personal charges on the account, the company may not pay them. You might want to pay the bill during a dispute with the company to prevent it from affecting your credit rating. If the company was supposed to pay the bill and was late with the payment, ask the employer for a letter explaining the incident, send it to the credit bureaus and they probably will remove the negative item from your record.
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