Company credit cardholders often dread the possibility of any adverse impact on their personal credit scores. Their fear is not completely unfounded, as credit bureaus, such as CIBIL and Experian, religiously report loan and credit card history. Company credit cards are not exempted from this practice. However, a few factors determine whether a company credit card report reflects on one’s personal credit history: the type of credit card, who’s the guarantor, and how the card is used.
In the case of a small business, a business owner, who is the primary account holder of a business card, must ensure timely credit card debt repayment to prevent any negative effect on their CIBIL score. As an authorized user of a business credit card, an employee is not liable for any repayment. The credit behavior of the primary account holder, the employer, might have an impact on the employee’s credit score, though. If the employer does not manage their business credit card responsibly, the credit score of any authorized user on the small business credit card might take a hit.
In the case of a corporate, however, the personal credit scores of corporate credit cardholders are not adversely affected, because the burden of the debt lies with the concerned company. It is important to note here that corporate credit cards do not call for any collateral or personal guarantee. Corporate credit cards do have a direct impact on a company’s business credit score, though.
As per RBI norms, each corporate cardholder must mandatorily be KYC compliant. The card issuer might also check a corporate card applicant’s personal credit report. In case of a credit check, there might temporarily be a negligible impact on the individual’s credit score. Alternatively, employees could check their credit scores at their end.
Once a corporate credit card is issued, the credit activity on an employee’s card is reported on the company’s credit report and does not reflect on the individual’s credit history. Corporate credit cards, such as EPIC corporate cards, thereby, have no impact on the cardholder’s personal credit score.