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Do Fuel Cards Help Build Business Credit?

Building business credit is an essential part of effective management practices. But for some companies, building business credit may prove challenging. Fuel cards are a great way to build business credit for a business looking to build its credit. Read on to find out how you can use fuel cards to help build business credit securely and effectively.   

What Is a Business Fuel Card?

A business fuel card or fleet fuel card works as a line of credit businesses use to pay for gasoline and other automobile-related expenses such as insurance or maintenance. Fuel cards can be secured or unsecured credit lines that offer a number of benefits and discounts.

Business fuel cards are generally net 30, meaning fuel card service providers report timely payments monthly to credit bureaus. As a result, business fuel cards are a highly effective way companies can build their business credit. 

In general, it’s easier for businesses to qualify for fuel cards than traditional credit cards. Some business fuel card providers may require a deposit to secure a fuel card. 

What Credit Score Is Needed for a Fuel Card?

Most fuel card service providers require customers to have fair credit. Fair credit is at least a 580 FICO score. A FICO score above 640 ensures the best chances of getting approved for practically any card.

Do Fuel Cards Report to Credit Bureaus?

Yes, fuel cards report to credit bureaus usually on a net 30 basis. By “net 30,” we mean they report timely payments after 30 days. You can typically expect to see on-time payments in your credit score after 60 of opening your account.

Are Fuel Cards Safer Than Credit Cards?

On the whole, fuel cards are much safer than traditional credit cards for fleet fuel purchases. Fuel cards are the best option for fleet owners since fuel cards have specific safety features such as unique driver IDs. This feature means that a special code must be entered at the pump in order to purchase fuel. The increased safety features allow fleet owners to reduce fuel card fraud and track spending effectively.

Prepaid Fuel Cards that Help Build Credit

Having trouble getting approved for a fuel credit card? Look for a prepaid fuel card that reports to the credit bureaus and helps you build credit. Typically, you’re only required to deposit funds onto the card. Each transaction you make helps to build your credit score, and gets you one step closer to credit card acceptance. Additionally, some of the best prepaid fuel cards give you access to their discount network and premium security features.

How To Build Credit With a Business Fuel Card

A business fuel card is a great way to build business credit since fuel card service providers report on-time payments to the three credit bureaus. Fuel cards allow businesses with bad or no credit to build their credit effectively.

Pick the Fuel Card That Meets Your Needs

Choosing the best fleet gas card for your business largely depends on your specific needs. There are several factors you must consider when picking a fuel card:

  • Discounts: Fuel cards generally offer discounts. So, it’s worth comparing which cards offer the best discounts.
  • Coverage: It’s crucial to know where your card will be accepted. This factor is key as not all gas stations accept the same fuel cards. Some fleet gas cards are tied to specific gas stations. This condition means that your drivers can only fill up at specific gas stations. Consequently, this situation may become inconvenient for your business operations.
  • Benefits: It’s worth considering what additional benefits you can get from a fleet gas card. For instance, you may get reward points, discounts at restaurants and supermarkets, or cash-back options.
  • Reporting: Proper reporting is a big deal. You must ensure that your chosen fleet fuel card offers comprehensive reporting on who uses the fuel card and when and where it is used. Reporting is key, particularly for tax purposes.
  • Fleet size: It’s worth noting that some fuel cards may have spending minimums or may only serve specific fleet sizes. Spending minimums are highly important because these types of cards may not be suitable for smaller fleets. 
  • Security: Most fuel cards come with standard security measures such as driver ID, vehicle information (VIN and/or plates), and odometer readings. Other cards come report vehicle and gas station location. These features are crucial to avoid misuse or fraud.

Utilize the Fuel Card at the Pump

Once your fuel card application is approved, you may need to wait between 24 to 48 hours for your card to be operational. When your card is working, you can begin filling up immediately. 

Here’s how you can use your fuel card:

  • Visit a participating gas station. It’s important that you fill up at participating gas stations; otherwise, your business fuel card may not work.
  • Though not always necessary, telling the cashier or gas station attendant you’ll be paying with a fuel card is a good idea.
  • Fill up. Please bear in mind you may have a specific number of gallons or dollar limit when you fill up.
  • Show your fuel card to the cashier or gas station attendant.
  • You’ll be prompted to enter your code or ID number in the POS terminal.
  • You may need to provide ID (driver’s license) to verify your ID.
  • You may also need to provide additional information, such as mileage.
  • The cashier will then process the payment.
  • You will most likely need to authorize the transaction by signature.

The process above applies to all drivers, including owner-operators. If you’re using an automated system, here’s what you can expect:

  • You’ll need to swipe your fuel card first. 
  • The machine will ask you to enter your PIN, code, or ID number.
  • You will most likely need to enter additional information, such as the vehicle’s license plate number, mileage, or VIN. 
  • You’ll need to select the fuel or dollar amount.
  • The machine will process the transaction and release the fuel.
  • Once you’ve finished filling up, you’ll be prompted to confirm the transaction.

As you can see, using a business fuel card is a great way to save time, money, and effort while keeping effective controls on your fuel expenditures.

Pay Your Bills on Time

When using a fleet fuel card to build business credit, it’s essential that you pay your bills on time. Paying your bills on time is crucial to maintaining or rebuilding your credit score. 

Here’s why:

When you pay your bills on time, or early if possible, the fuel card service provider reports your payments to the credit bureaus. The bureaus process your payments and display them on your report. Gradually, your credit score will begin to climb.

A good rule of thumb is to pay your bill one or two days before your payment deadline. Please remember that if you pay on the last day, your payment may not get reported on time. As a result, your payment may be categorized as late even though you paid on time. 

You can build your credit from scratch or improve it by ensuring you keep consistent and timely payments.

Don’t Miss a Payment

It’s essential that you avoid late or missing payments on your business fuel card. Late or missing payments negatively impact your credit score. For instance, a late payment past 30 days due can knock as much as 100 points off your credit score.

It’s worth noting that you may catch a break with lenders if you miss your payment deadline by a day or two. Fuel card service providers may not report the payment as late. However, there’s no need to take a chance. Whenever possible, try your best to pay one or two days in advance. If you do miss your payment deadline, try to make your payment as soon as possible. Letting a payment go past 30 days due is a surefire way to send your credit score tumbling. 

If you’re planning to use a fleet fuel card to build your business credit, you cannot afford to miss payment deadlines.

Fuel Card vs Credit Card for Building Credit

When looking to build business credit, is it better to use a fuel card or a standard credit card?

Generally speaking, fleet fuel cards and credit cards can help you build business credit. However, a fleet gas card is generally a better option for fleet owners or truckers. Let’s take a closer look:

Business fuel cards

Pros:

  • Easier to get approved even with a low credit score.
  • Robust security measures.
  • Benefits and rewards designed specifically for fleet owners and truckers.
  • Comprehensive controls help track spending.
  • Reporting to credit bureaus.

Cons:

  • Limited coverage in businesses such as supermarkets, restaurants, and shops.
  • Low credit limits.
  • May need to provide a security deposit as collateral.

Credit Cards

Pros

  • Higher credit limits.
  • Can be used in a wide number of locations.
  • Generally offer better rewards across several products and businesses.
  • Accepted virtually everywhere.

Cons:

  • Credit cards don’t offer enhanced security measures.
  • No comprehensive reporting on fuel expenses.
  • Require a solid credit score to qualify.
  • May need to pay a security deposit.
  • Might be more vulnerable to fraud.
  • May not report to the credit bureaus.

Verdict:

Business fuel cards are a better choice for fleet owners and truckers. Fuel cards provide features designed to help small and large fleets. Plus, business fuel cards are great for businesses looking to build credit. In contrast, fleet owners and truckers need to have a good credit score to qualify for traditional credit cards. The lack of specific safety features and reporting is a major downside to credit cards for fleet owners. Therefore, traditional credit cards are not the best way to build business credit, especially if you’re rebounding from bad credit or have no credit history.

Build Business Credit With a Fuel Card

Fleet fuel cards provide fleet owners and truckers with a highly effective way to build business credit. When rebounding from bad credit or building credit history, business fuel cards are the go-to choice to build business credit. Remember to do your homework before applying for a business fuel card. Choosing the right card for you will set you on your way to building business credit.

Hyper-Secure Fleet Cards - With Discounts Everywhere!

AtoB helps businesses take control of their biggest expenses – people, fuel and vehicles.

Hyper-Secure Fleet Cards - With Discounts Everywhere!

AtoB helps businesses take control of their biggest expenses – people, fuel and vehicles.