The corporate credit card does affect CIBIL, as all loans and credit cards details need to be reported by Credit bureaus, such as CIBIL . If you took a Karbon corporate credit card, your personal CIBIL will not be affected. We at Karbon report your card limits and card repayments to your company’s CIBIL. Unfortunately, that would not be the case with most bank cards, as the company owner/directors are guarantors of your company’s corporate credit cards. Even if you put fixed deposit, you might still be guarantor for your company’s corporate credit cards. Before taking corporate credit card from a bank, you must check whether the company owner would be a guarantor or not.
Why do banks want the company’s directors want to take personal liability for all corporate loans ? Well, it a standard practice by most banks in India and abroad, as few promoters tried to runway from their company liabilities in the past. We do not disagree with this practice, and we understand the rationale behind this. We are a new age startup, and we are giving corporate credit cards to a different market segment ( startups ) than what banks do. The startups are run by smart and educated folks, and most of them came for middle class background. They put their heart and soul in their companies, and they take their responsibilities quite seriously.
It is always a good idea to check CIBIL reports on monthly basis and review all new loans. It is now free to get your CIBIL report, and you can now get your free credit score from CRED and multiple other apps. If your company’s corporate credit card details are present in your personal CIBIL report, then the bank did report all corporate credit card repayments to CIBIL, and you are considered guarantor for your company’s corporate credit card.
It is easy to walk away from responsibilities, but the true character of an individual is shown during adversity. We think it is wise to give a corporate credit card on the basis on company’s finances, not on the basis on promoter’s ability to pay. We believe in startups and entrepreneurs behind SMEs and startups, and we want them to soar high without worrying too much about what if they fail.