How a Corporate Card Can Affect Your Personal Credit Score

Use Company Credit Cards Responsibly

Corporate credit cards are popular for helping companies dole out needed money to employees who are traveling or need to be able to pay quickly for items in the routine course of business. But the idea of giving an employee a company credit card has ramifications, not just for the company, but also for the employee.

One of the biggest problems with a company credit card is the ambiguity of letting an individual buy for a company. There's a certain "gray area" that taps into the side of human nature that isn't naturally frugal. Some employees are tempted to use the company card frivolously until they finally err on the side of overindulgence and get brought in on the carpet. There are even cases where employees are punished for buying things that they had express permission to purchase. There can be a lot of misunderstanding when an employee gets control of company resources through a credit card.

Some employees fall into the habit of seeing the company credit card as a kind of "cash cow," getting confused about what is and is not acceptable. Using a corporate card responsibly can be an efficient way to operate, but for other employees who may not be "good with money" or aren't inherently detail-oriented, a company card can be a burden.

There are also long-term consequences of company card use, especially in "joint cards" where more than one employee, co-owner, or company agent may be signed onto the account. It's never a good idea to leave your name on a credit line, for any reason, if you're not in control of spending. In cases where employees leave a company without changing the information on a credit card or credit line, it can be hard to clear the name of the person who is no longer active on the account.

Generally, a lot of people might assume that their employer is much more financially solvent than they are and that a company card will never max out, but that isn't always the case. A company's credit card is only as strong as the company's bottom line. Before signing on, an employee should look at overall revenue versus expenses to avoid taking the fall when a bad loan affects their individual credit history.

To make sure your company credit card doesn't negatively affect your personal credit score, use the same responsible and savvy practices you'd use with a personal credit card. When you walk out the door, make sure your name leaves the company with you. Ask the accounting department to change the credit lines you were involved in to reflect your departure.

Another way to avoid unanticipated credit card issues is to sign up for credit monitoring. A credit monitoring service can help you stay informed about what's happening with your personal credit report on a day-to-day basis.

Read More About Credit Scores

• How missed and late credit card payments affect your credit score
• Your Credit Score: How Your Credit Cards Influence It
• The Relationship between Credit Scores and Age
• Credit Scores vs. FICO VantageScores
• Why Each Credit Bureau Has Its Own Credit Score
• Medical Bills Don't Have to Ruin a Credit Score
• Chapter 7 or 13 Bankruptcy Can Affect Credit Scores
• Ordering Your Credit Score From a Credit Bureau
• What is a Bad Credit Score?
• Factors That Damage Your Credit Score
• What Is a Good Credit Score?
• Credit Score Myths
• How Credit Scores Are Calculated
• Why You Need to Know All Three Credit Scores
• What Are the Three Credit Bureaus?
• How Credit Scores Affect Insurance Premiums
• Student Habits That Kill Your Credit Score
• Store Credit Card Application Could Damage Your Credit Score
• International Credit Score
• What A Credit Card Balance Does to Credit Scores
• How a HELOC Affects Your Credit Score
• Medical Credit Score
• Your Credit Score May Be Worse Than You Think
• FICO - What is Coming in 2009
• Credit Score Ranges
• Five Parts to Your FICO Credit Score
• How Corporate Cards Affect Your Personal Credit Score
• Who Wants to Know Your Credit Score
• Credit Rating - How Your Credit Gets A Score
• Credit Line and Your Credit Score