Can a Corporate Card F*ck Up my Credit Score?

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Having a corporate credit card is awesome. Being able to say: “Oh, don’t worry, I’ll expense it” feels pretty darn cool, I can’t lie. But with great spending power comes great responsibility, and today’s reader wants to make sure she tackles that responsibility head on. Here she is:

Hey Nicole! My name is Natalia and I work in marketing in the Austin area. I've been working in marketing/PR since graduation and at each company I've had a corporate card for travel expenses, photoshoot expenses, and so on. Listening to your podcast, I know it's not the best thing to cancel credit cards. So, I wanted to ask: are the credit cards I've had through my job, and the cancellation of those cards when I've left those jobs, hurting my credit score? My two cents?

This is a great question Natalia and I am so happy to hear you thinking critically about your credit, that is big Rich Bitch energy. I have some great news, which I think will apply to you and your situation. If you’re working for a corporation or a company that isn’t classified as a small business, a company credit card will almost never affect your credit score.

You may be thinking: “Yes, that is great news! But… why isn’t my credit score affected by a corporate card? And how can my personal credit card take notes?”

Ah Natalia, if only your personal credit card would abide by the same rules as your corporate card… but that’s not going to happen, unfortunately. But we can still appreciate how our corporate card works. Let’s get into it.

Let’s think about what your credit really says about you: your credit score is basically an assessment of how likely you are to pay back debt, or, how financially trustworthy you are. Your credit card usage contributes to this overall picture of financial trustworthiness. But every time you swipe a company card, you’re not promising that you will pay the bill, you are promising that your company will pony up.

Therefore, because your company will be the one footing the bill, any credit card usage is building an argument of how your company pays back debt, not you. This pretty much takes you out of the picture entirely, and so your credit score is unaffected.

However, being able to use a corporate card can indirectly help your credit card score. I’ll give you an example. Say your company has a conference in Vegas and you are one of the lucky employees selected to pack your bags and head to Sin City. If you do not have a corporate card, you would have to throw down your personal credit card for the airfare, hotel, Ubers, meals, everything, and then ask your company to reimburse you. But when it comes to your credit card, what happens in Vegas, doesn’t stay in Vegas. Putting all of those charges on your credit card up-front could affect your credit score by hurting your utilization rate, even if you are reimbursed later on.

Now, let’s say you’re taking that same trip— but this time, you have a corporate card. In this scenario, your utilization score won’t be affected because you’re not putting any charges on your personal card.

So that’s one way a corporate card could affect your score, but again, it’s very indirect. If you’re wondering whether you’ll get a credit alert as soon as you sign up for a corporate card saying that your credit score has gone down X points… no, that’s not going to happen. In the same vein, your personal credit score is not going to benefit from your company paying your credit card bill on time. Pros and cons!

xo,

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