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4 Replies Last post: Dec 13, 2007 2:50 PM by CorpCons08

EIN and Business Charge Card

Dec 26, 2007 1:27 PM

Click to view Excellent's profile Mogul Excellent 46 posts since
Oct 12, 2007

I recently applied for a business charge card. Per my accountant, I was told I could apply for the card under my EIN. I was asked for my social security number as well, which I gave. I have an above average credit score (according to Experian) but I was denied a business charge card. I'm confused as to why I was refused when my personal credit is above average. Does this make sense?
Tags: business_start_up, new_business, new_business_idea Report as inappropriate
Click to view DomainDiva's profile Mogul DomainDiva 1,732 posts since
Oct 10, 2007
1. Re: EIN and Business Charge Card Dec 26, 2007 1:38 PM
in response to: Excellent
Credit scoring has changed the magic number is now 750, it was 730. Perhaps you were denied credit because you do not have a credit history with that EIN as well as the bank/credit card company you applied with. Applying for business credit with a bank or credit card company that you are already doing business with gives you a huge edge.

Your debt to equity ratio may also have been affected if the credit line had been approved. You can request an in-depth explanation of the denial.
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Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
2. Re: EIN and Business Charge Card Dec 26, 2007 1:43 PM
in response to: Excellent

An "above average" credit score isn't necessarily the same as a "good" credit score. Other things that could have affected the decision are negative information on your credit reports or having a substantially higher average personal debt-to-income ratio in the past year than you did in years before.

Did you apply for the card through the bank at which you opened your business checking account? If not, try there -- and if so, ask your banker for the explanation of why you were turned down and what you need to do to get a business credit card.

And that seems like a nice segue to the "Get to Know Your Banker" story I posted on this site:

http://smallbusinessonlinecommunity.bankofamerica.com/docs/DOC-1581

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Click to view Lighthouse24's profile Mogul Lighthouse24 2,396 posts since
Oct 10, 2007
3. Re: EIN and Business Charge Card Dec 26, 2007 1:46 PM
in response to: DomainDiva
I guess I was writing my response as DDiva was posting hers . . . at least we're in consensus!
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Click to view Excellent's profile Mogul Excellent 46 posts since
Oct 12, 2007
4. Re: EIN and Business Charge Card Dec 26, 2007 1:57 PM
in response to: DomainDiva
As of 12/25/07, my credit score was 784 (Experian). Yes, it is true I have not established any business credit. My LLC was only formed a couple of months ago and the EIN came around the same time. I applied for the business charge card through the same company that I've been with (and established credit with) for the past 10 years. It still doesn't make sense.
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Click to view DomainDiva's profile Mogul DomainDiva 1,732 posts since
Oct 10, 2007
5. Re: EIN and Business Charge Card Dec 26, 2007 2:12 PM
in response to: Excellent
784????? Thats in the Excellent category!

It must be your debt to equity ratio...are you carrying any credit card balances? New car? Mortgage less than 1 year old? If none of the above and with 784 I would be hoppin mad....get the reason you were denied ...in writing and then start making calls.
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Click to view Excellent's profile Mogul Excellent 46 posts since
Oct 12, 2007
6. Re: EIN and Business Charge Card Dec 26, 2007 2:28 PM
in response to: DomainDiva
No, I only have one credit card (for the last 10 years) which I never carry over a balance.

No new car, my car is paid for.

No mortgage, my condo is paid for.

I do have a school loan of about $8000 which I am paying off. It must be the home equity line of credit I took out (in August) to start my business.
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Click to view LUCKIEST's profile SCORE LUCKIEST 7,935 posts since
Aug 6, 2007
7. Re: EIN and Business Charge Card Dec 26, 2007 2:38 PM
in response to: Excellent
Excellent, You keep adding more to the picture. Have you spoken to your accountant after you were turned down??
What did he say?? Now you tell us about .the home equity line of credit you took out to start my business.
You have TWO loans outstanding. The school loan and now the home equity line of credit.
Interesting, what next?? LUCKIEST
.
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Click to view DomainDiva's profile Mogul DomainDiva 1,732 posts since
Oct 10, 2007
8. Re: EIN and Business Charge Card Dec 26, 2007 4:49 PM
in response to: Excellent
It will not do any good to keep guessing. Request the reason for the refusal in writing...they have to comply.
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Click to view CorpCons08's profile Mogul CorpCons08 1,128 posts since
Nov 14, 2007
9. Re: EIN and Business Charge Card Dec 27, 2007 12:30 AM
in response to: Excellent
Excellent,

Business charge cards no longer look at a credit score in its entirety.
As many of the members of this community have noted, negative items on your credit report will effect their decision.
The other thing is, if you have any kind of public records on your credit report.
Many people forget to check this section of a credit report.
With identity theft being on the rise, you want to monitor this closely to make sure nothing is sitting in there.
Banks also want to see that your business has some time in operation.
Being that your business is new, they may not qualify you for the program you applied for.
You should speak to the bank in question and ask them if they have a "new small business" credit card.
These cards are designed for people in business for less than 2yrs.

Best wishes for a safe and happy new year.

CC08
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Click to view jesse5621's profile Professional jesse5621 4 posts since
Sep 28, 2008
10. Re: EIN and Business Charge Card Sep 29, 2008 10:28 AM
in response to: Excellent
Hello,

Something similar just happend to a client and after 2 days of researching, talking to the bank, and reviewing her excellent credit it turned out
that it was the bank. Currently, many banks a restructuring their loan policies among other products and that may cause them to decline. I would
move on to a bank that you know is not going to have issues...

Hope this helps.

Jess
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