Your credit score is like your reputation: It takes a long time to build up, but just one mistake can knock it down. A late credit card payment, for example, can cost you several points. And now, when a mere 20 points can make the difference between the best rates on car loans and mortgages, it’s important to pay attention to all the factors that could pull you up–or down. An easy way to keep your score in tip-top shape is to pay your credit card bills on time and keep your debt-to-available-credit ratio low.
But what about corporate credit cards? If you’ve got a job, there’s a chance your employer had you sign up for a corporate credit card for approved work expenses. But what if your employer is late paying the bill? Or you’ve had a month of hefty work charges such as airline and hotel bills that could inflate your level of debt?
“If your corporate card’s activity shows up on your credit report, then yes, it’s going to impact your score,” says Craig Watts, a spokesperson for Fair Isaac.
That got me wondering–was the corporate American Express issued to me by my company appearing on my credit report? I checked it out, but it was a little confusing. My credit report from Equifax indicated that American Express made an inquiry into my report when I started this job, which makes sense. I remember having to fill out some paperwork to apply for the AmEx, so I’m assuming American Express wanted to check me out to make sure I wasn’t a deadbeat.
But when I looked into the revolving accounts listed on my report, American Express was nowhere to be found, though all my other credit cards were. Puzzled, I called the folks at AmEx to get the scoop. Turns out, American Express pulls the credit report for any employee who is going to be issued a corporate card to make sure that employee doesn’t have a derogatory credit history. “If you do,” says Gail Wasserman of American Express, “we might ask your company to guarantee your charges.”
But beyond that, American Express does not report your corporate card’s activity to the three credit bureaus. Of course, every company has a different policy on how it pays for expenses charged to a corporate card. Some might have the employee make the payment and issue a reimbursement, while others pay the card off directly after an expense report is submitted. None of that matters to American Express–they’re not going to report a late payment or high balance to your credit report. (Of course, if you’re 45 days late making a payment, AmEx will now slap you with a $39 fee, up from $29. That’s enough to get me to submit my expense report on time–because my employer certainly won’t pay for that.)
So does that mean you can get away with charging up a storm or never paying your corporate AmEx bill? Hardly. If an account is six months past due, all bets are off. American Express will notifty the credit bureaus of your delinquency in that case. “After 180 days, you’ve had plenty of time to go back to your company to get reimbursement. So if you bought something they denied, that’s between you and your company,” says Wasserman.
American Express issues 7.1 million corporate cards around the world and handles 60% of Fortune 500 companies, so there’s a good chance your corporate card is with them. But what if your company has, say, a corporate MasterCard issued by one of more than a dozen banks around the country? Or from another card issuer who uses Visa or Discover? Then it depends on that issuer’s policy. To find out if your corporate card usage will impact your credit score, look at your free credit report from annualcreditreport.com. If the corporate account is showing up under your revolving accounts, you have your answer. If you’re still unsure, call the isssuer directly. But chances are, your personal credit score won’t escape major corporate card delinquencies unscathed. So get those expense reports in on time.