Author Topic: Business expenses hurt credit score  (Read 701 times)

breeav

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Business expenses hurt credit score
« on: May 01, 2018, 12:56:42 PM »
I need some advice from people who are familiar with credit scores. My husband and I are getting ready to purchase our first home, we have saved for a down payment and have good credit. My husband works remote and his company reimburses for expenses rather than using a company card. We didn't realize that putting his expenses temporarily on a credit card would hurt his credit so badly - after a business trip last month it dropped his score (I don't have income, so we'll use solely his income/score to qualify) by 30 points. I used a credit score calculator to see how his score would be affected by us repaying the trip's expenses, but it only shows it recovering by 2 points. How is this possible? Is there any way to recover credit or appeal this process? Is that a large enough drop to really affect our potential rate? If the specific scores matter, it dropped from 756 to 725. We'll be working with a lender in the next week but I thought I might reach out to see if anyone has some knowledge in the area.

sokoloff

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Re: Business expenses hurt credit score
« Reply #1 on: May 01, 2018, 01:14:55 PM »
I don't think you're going to see a rate hit or approval problem in a case like that. If you do find a problem, the way around it is to either tamp down on the expenses, pre-pay the card, or make payments online every couple of days.

The last refi I did a few years ago, my score was in the 730 range (due to some 6-year old satisfied tax liens) I think and I got the readily and widely advertised rates and terms without any questions raised.

Papa bear

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Re: Business expenses hurt credit score
« Reply #2 on: May 01, 2018, 01:22:05 PM »
Call your CC company and try to get a higher limit on the card. That will improve the score.  Your score is partially based on the amount you have borrowed vs the amount you "can" borrow.


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GetItRight

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Re: Business expenses hurt credit score
« Reply #3 on: May 01, 2018, 02:19:35 PM »
A 31 point drop seems like a lot for work spending. I've never noticed a drop in score even when I paid my cards monthly rather than weekly. I'd guess the balance of reimbursable expenses must be effectively maxing out the cards used? As someone else said, increase the credit limits, pay them off more frequently, after each large purchase if necessary.

bacchi

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Re: Business expenses hurt credit score
« Reply #4 on: May 01, 2018, 02:59:23 PM »
Do you own your own company? Some card issuers don't report business cards on personal credit reports.