Does corporate credit card build credit?

The utilization of a business credit card is one of the easiest ways to manage business-related transactions. Corporate cards are favorable compared to reimbursements because they prevent users from dipping into their funds. Moreover, the finance team can directly receive statements to make auditing and accounting easier. But you might wonder whether corporate cards have any effect on your credit score.

Business credit is directly linked to a company’s financial statement - including corporate cards. However, if you own a small business then your company card is included in your personal credit score. Some businesses also include joint liability; so defaulting on a card might reflect on your credit score.

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Credit check process for corporate cards

The credit check process is an unavoidable part of applying for a card. Any credit card, for that matter, involves a credit check. This is because you are taking responsibility to pay off all loans and interest amounts. Applying for a card under your name (or if you are the primary for a company account) means that your personal credit score will be examined by the lending body.

Your credit score is a compilation of all your loan payments - the timely manner in which you pay, the amount of debt you have remaining, and any assets that can be used as collateral.

If you are simply a company employee then your personal credit score might not be checked. All your payments and debt will be added to the company credit score. This is especially true for a large company. But if you are an employee applying for a small business credit card, then there is a chance your credit might be examined.

How to improve business credit score with corporate credit cards?

Corporate liability for business

When a business signs up for credit, then liability rests with the primary listed on the account (usually the business owner). This liability extends to every card issued for employees in the name of the business. As a result, all transactions done by employees for business purposes lend to the company's credit score. In turn, the company is liable for paying off all dues, timely payments, and any loan carry-overs. This kind of corporate liability, when controlled responsibly, can help your credit score soar.

Custom company credit card policy

Corporate credit cards don’t need to be a pain point for your finance team. Customization of policies is a good way to keep your budgets under the limit. Corporate cards will automatically reinforce policies without manual intervention. You can link cards to customizable budgets, create policies, and prevent misuse of cards or unauthorized transactions. The best part? Adding a budget or card limit doesn’t deduct your Bill Pay balance. Money only gets deducted when the card is swiped.

Cards for businesses with low or no credit history

Corporate cards are a fantastic way of building your business credit history. Applying for a card early on, even if you don’t intend to use it, establishes your credit score early in your business journey. Keeping payments small, paying dues on time, and underutilizing your credit limit can help your company's credit score grow. This is ideal for when you truly need to apply for loans or larger credit amounts. Lenders and banks lean towards businesses with a strong company credit score - and corporate credit cards are an easy way to build one.

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Corporate cards

Corporate credit cards from Volopay are clean and swift to use. They allow complete flexibility in terms of usage, as well as safety. You can apply for physical cards, as well as unlimited virtual cards. Ensure that all your expenditure is tracked in real-time.

Multi-level approvals for better control

Volopay lets account admins add approvers of the first and second levels. This allows every project manager and administrator to have full control over corporate credit card spending. These approvers can also request more details about transactions, adding to the ease of auditing.

Built-in spend controls

All cards come with built-in spend controls to create a healthy spending culture in the company. Admins can set expenditure rules so that out-of-policy transactions are automatically declined. Perfect for ensuring your business credit is never in trouble.

FAQs on corporate credit cards

What is the difference between corporate credit cards and small business credit cards?

Small business credit cards are, as the name suggests, for small businesses. You apply for them as a small business owner (or a high-level employee of a small business) and take responsibility for paying any dues. Corporate credit cards are for employees of larger corporations. These are issued for employees who frequently need access to a cash flow for business purposes.

Will I have to undergo a credit check for a corporate credit card?

As an employee of a large business, you don’t have to. Your credit card approval is based on the company credit score. But if you are the primary for a business then you certainly have to. You also might be subject to a credit check if you’re an employee applying for a small business credit card.

Who is liable for a corporate credit card?

The company decides who is liable for a corporate credit card. If the liability is an individual employee, then the company assigns budgets. Volopay’s transparent system lets users be added to a company account. The company is liable for payments, with users having to go through manager approvals for transactions.

Can I set a limit on corporate cards?

Yes, of course. Volopay account admins can set a limit to cards, and link them to department-specific budgets. Any requested change on a limit will have to be approved by the delegated party.