Does american express business card report to credit bureaus

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1. Does my corporate credit card impact my credit score?

Published: May 13, 2009 5 min read

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.

A business credit card is a great tool to separate your business and personal finances and establish your business credit history. But applying for and using a business card could impact your personal credit score, depending on the card and how you use it.

How business cards affect personal credit

Applying for a small-business credit card will likely result in an immediate, albeit temporary, hit to your personal credit score due to a hard inquiry from the card issuer. This is usually small and short-lived.

That’s because card issuers typically rely on your personal credit for approval, even on business cards. Most also require a personal guarantee that says you’ll repay the debt if your business fails, so your personal credit history helps issuers assess their risk.

Beyond the initial hard inquiry, most business cards only report activity to commercial credit bureaus. The one exception: negative payment history.

Several business credit card issuers will report late payments and serious delinquencies to consumer credit bureaus. This will negatively impact your personal credit.

Which card issuers report to consumer credit bureaus?

NerdWallet reached out to representatives from nine major credit card issuers and asked how they report business credit card activity. Here’s what we found out:

Does the issuer report small-business credit card activity to consumer credit bureaus?

Does the issuer report small-business credit card activity to commercial credit bureaus?

When business card activity is reported to consumer credit bureaus, it affects only the credit of the primary cardholder — the individual who applied for the card and personally guaranteed the debt on the account. Employees who carry company-issued credit cards generally won't see the activity appear on their personal credit reports.

Even if the card doesn't report to consumer bureaus, the personal guarantee remains in effect: The primary cardholder is on the hook for the debt on the account. If that debt goes unpaid and ends up in collections or court, that could be reflected on the cardholder's personal credit report and damage their credit scores.

Lines between personal and business can blur

When business credit card activity shows up on your credit reports, it’s treated the same as any other credit card debt by both the FICO and VantageScore credit scoring methods. Data from that account will affect your length of credit history, credit utilization and payment history, among other factors.

Assuming you have a card that reports to both commercial and consumer credit bureaus, what should you expect?

• If you pay on time and stay well under your limit: The account may help both your personal and business credit scores. This could make it easier to qualify for loans on good terms and negotiate government contracts.

• If you miss a payment or use too much available credit: The account could hurt both your personal and business credit scores. Even if you close your card, its history could stay on your personal credit reports for up to 10 years.

Should I get a business card that doesn't affect personal credit?

If you can imagine making a few slip-ups with business credit, you might want to get a card that doesn’t report to consumer credit bureaus as a precaution. But generally, it's a better idea to apply for the card that offers the rewards and benefits you’re most interested in, instead of focusing on the card’s reporting policy.

It’s important to be mindful of how your business credit card affects your personal credit. But don’t make the mistake of thinking you can get rid of all your personal liability by choosing a business credit card that doesn't report to consumer credit bureaus. If you want to protect your personal assets, your best bet is to borrow sparingly and pay your bill on time, every time.

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