Does a corporate credit card build credit?
Can a corporate credit card build credit?
If you’re an authorized user of a corporate credit card with a large company, using the card is unlikely to have much effect on your personal credit. This is because the balance and payment information of a corporate credit card is reported under the business and not the individual holders.
Different corporate credit cards will have different terms. Some cards will only make a business responsible for repaying charges. Others will have joint liability with all authorized holders. In this instance, corporate credit card activity could appear on a user’s report if a debt becomes delinquent.
If you’re the primary account holder of a small business credit card, then the effects will be similar to a personal credit card. You’re offering a personal guarantee of repayment on all debts on that credit card. The issuer will carry out credit checks before approval and report payment information to the major credit bureaus.
Authorized users of small business credit cards could also see their credit affected by its activity. If the credit account is managed responsibly, then all named holders could see improvements to their credit. Conversely, poor management can negatively impact all cardholders’ credit histories and scores.
Will I have to undergo a credit check for a corporate credit card?
When you apply as the primary account holder of a small business credit card, you are personally agreeing to repay the loan amount. The issuer will run checks on your personal creditworthiness before approving your application. Authorized holders of a small business credit card will not have to undergo credit checks.
Employees that are authorized to hold and use a corporate credit card may have their credit history checked by the issuer. This hard credit check can have a small negative impact on your credit score. However, the effects will only be temporary.
|Type of credit card||Type of holder||Credit check required?|
|Small business credit card||Primary account holder||Yes|
|Small business credit card||Authorized user||No|
|Corporate credit card||Authorized user||Possibly|
How can I use a corporate credit card to improve my credit?
Responsible management of corporate and small business credit cards is beneficial to all users. As with any credit card, you should be paying bills in a timely manner and carrying over no debt into the following month.
Regular examination of credit card statements is also important to identify unauthorized charges, which could indicate fraudulent activity. If you notice anything suspicious, make sure you report it immediately.