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I've started an LLC (US-based) and have an EIN that I'm bootstrapping myself and self-funding. All my addresses and details are registered in the US. I'm the sole employee, but have zero revenue as it has just been founded. It's a software company that is conducted 100% online. I want to get a credit card to put a clear barrier between my personal spending and the company's. The monthly expenses are relatively low. I'm not looking to take on debt, only to pay for the services I need to get things off the ground.

I have a credit history of over 11 years and a credit score of over 800 according to Chase's "credit journey" reporting. I have no debt and 2 credit cards with a "decent" limit. I'm living abroad currently (location irrelevant since I'm conducting everything as if I'm in the US) with a gross income of about $45k/year.

Despite all of my applications to US-based credit card companies (Chase, Capital One, AmEx), I cannot get approved for a credit card. I have now resorted to applying for personal cards, but am still getting my applications denied. I can remember getting spammed constantly with credit card offers, but now cannot get approved for one despite my best efforts.

What's preventing me from getting approved for a card? Would calling be more effective in getting approved?

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    " I'm living abroad currently with a gross income of about $45k/year" where are you living? where is the business registered? where are the credit card companies? – mhoran_psprep Mar 31 at 12:30
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    I think you need to clarify the question. As I read it, YOU are not applying for the credit card, the LLC you've started is. If so, you and the LLC are separate entities (which is, after all, the point of an LLC). The LLC has no credit history. – jamesqf Mar 31 at 17:09
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    @jamesqf - exactly! OP wants to know why they can't have both "I want the LLC to shield me from liabilities" and "Why doesn't my credit help me out here?" Either the debt is yours and your credit will matter, or the debt is the company's in which case your personal credit isn't relevant. – Kevin Mar 31 at 21:39
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    @Kevin Not true. You are "jointly and severally liable" for a common business credit card: they can go after you and/or your company for your debt. Approval is based on individual credit. These are the common cards you see in ads. A corporate card is solely under the company's credit, and that requires typically $5-10 million of annual revenue. – user71659 Apr 1 at 0:55
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    @jamesqf No clarification is needed. The OP is applying for a standard business credit cards, which always requires a personal guarantee. Read more at NerdWallet or CreditCards.com – user71659 Apr 1 at 1:27

11 Answers 11

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This question is impossible to answer without knowing some details that you probably should not share over the internet. As you are discovering credit score is not the only means utilized for credit approval.

Since you are looking to establish a clear delineation between your personal life and your business, which is a great idea, you should work with your business banker. That is the bank where you have your business checking/savings.

You may still be denied, but you should then utilize a business debit card. Utilizing a business debit/credit card makes accounting easier as the billing cycles begin and end with the month.

It seems to me your disapproval is income related, but that is a guess. Overseas income of 45K may not be enough to justify your current max revolving credit line. Additionally it seems that you are looking to borrow heavily to bootstrap your business. Given the frequency that small business fail, that seems like a smart move from the bankers prospective.

Self funding your business will greatly improve your chances of success in starting a business.

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    P.B., I do feel the "impossible to answer" is confusing or "not mentioning the elephant in the room". There's no such thing as a credit card for a business. The answer to the headline question "Why can't an LLC get a credit card..." is that "businesses can't get credit cards." (Sure, they'll print a company name on your card for you.) – Fattie Apr 1 at 10:12
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    "from the bankers prospective" perspective? – Michael Apr 1 at 12:50
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    Adding other details for OP: (1) The denial letter will often have the why. (2) Most banks have a reconsideration department. There's no harm in googling for that banks recon line and asking a human to look it over. – CeePlusPlus Apr 1 at 23:12
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You could be hurting yourself by submitting so many credit card applications, which can be a red flag in many systems regardless of your personal credit score. I realize you say that according to Chase your score is over 800, but what does TransUnion or Equifax say your score is? Do you belong to any of the sites that let you track your score for free? It's a good way to see what's on your report in detail, especially when it comes to inquiries.

Some banks, such as Capital One, will deny you a card you may otherwise qualify for simply because they see so many recent inquiries, so keep this in mind. If you're going to apply for any further personal cards, look for ones that only do a "soft" credit pull for the initial approval. A soft pull just grabs metadata from your report without doing a hard inquiry, which temporarily dings your score by a couple points. "Soft" credit pulls generally don't have any effect at all on your credit score. If the issuer approves you with a soft pull then most of the time they'll give you a final approval and might do a "hard" pull in the process.

Look for offers where you're pre-approved or where it says there's no impact on your credit score to apply, and you should be able to avoid inquiry issues this way.

It's possible the fact you're living abroad is complicating your efforts as well, I don't know, but it's certainly something to consider when shopping for a credit card. Learn whether the bank has policies about overseas clients - some might, since it could make it more difficult to collect if you turn deadbeat on the debt.

If you are a new business trying to obtain credit then it isn't easy, unless you're willing to make personal guarantees of the debt, which then entangles you personally in a way you're trying to avoid.

When I wanted to build credit for my new business, I used Wells Fargo, which offers a secured business card that doesn't involve me personally but reports to the major bureaus plus Dun & Bradstreet. By the way, if you don't have a Dun & Bradstreet number for your business, get one. MANY companies check D & B for your business credit when evaluating your application, so lacking a file is showing you have no history.

You need to establish "trade lines" for your business to build its credit profile. You do this by applying for "NET 30" accounts with companies you'd do business with for supplies and services. You can obtain fleet fuel cards for your business - Pilot/Flying J is the easiest one to deal with, and everyone else will give you a card too but will probably want a deposit for the first year until you establish a history.

Building business credit is not nearly as quick or easy as building personal credit history - mainly because it's a much less competitive space than personal credit cards, so there are far fewer options. Not only that, but the reporting process can be slow - some creditors I deal with only report every three months, so it takes time for the first report to post and then for any positive updates to appear subsequently. Don't make the mistake of confusing how personal credit works with what happens in the business world - the rules can be very different. Educate yourself.

IMPORTANT - Whatever trade lines you establish, make sure they report to the bureaus to build your company's business credit profile. MOST companies extending trade line terms don't report, so this is crucial if you're only opening a trade line hoping to improve your business credit.

This is a basic primer, but I hope it's informative enough to get you started. As a closing piece of advice, slow down and quit trying to do so much so quickly. If your business doesn't need credit right now then quit worrying about it and focus on building your revenues. Without being able to show revenues, it's going to be difficult to get ANY creditor to extend credit to your business without a) personal guarantees or b) deposits.

I hope this helps. Good luck!

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    Exactly. The querying bank assumes those recent inquiries were successful, and it looks like you're trying to rack up a bunch of credit in a hurry, and such people tend to be doing something they should not, like buying a new car on credit cards instead of a car loan. – Harper - Reinstate Monica Mar 31 at 23:20
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    This seems very likely. Too many applications and/or living abroad. Though, I suppose "too many applications" wouldn't explain the first couple of denials. ;) – TTT Apr 1 at 17:20
  • I'd have to assume that "living abroad" is the main factor, as a stolen identity and "out of the country" combo are likely "normal" fraud attempts at getting a CC to fill with purchases then never repay, as the CC company likely has no way to enforce payment from another country. As they aren't going to bother to spend the time or money to determine a real person from an identity theft, they just aren't giving the OP a card. – computercarguy Apr 1 at 17:48
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Just use a personal credit card and be done with it.

Your idea of compartmentalizing for bookkeeping purposes is correct and essential to protecting the liability shield provided by an LLC. However it does not require the credit card to be in the LLC's name; it only requires scrupulous separation of bank accounts -- that is, this bank account is used exclusively for the business' business, and that bank account is used for personal.

However, to be clear, that is not enough. What you also need are competent accounting books. And you are absolutely correct that using an entirely separate card for everything greatly eases the bookkeeping, since you only have to reconcile the accounting books against account activity. But you still need the separate accounting books; that is what will defend your LLC's independence more so than the names on the accounts.

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  • Aside - is it "bedone" or "be done" ... ??! – Fattie Apr 1 at 10:05
  • Agreed! Obviously this doesn't answer the question of why, but this would be my proposed solution until a business specific card can be obtained in the future. – TTT Apr 1 at 17:18
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    @TTT Yeah, I didn't think OP didn't need to be beat up anymore about novice LLCs and applying for US domestic credit when you don't live there. – Harper - Reinstate Monica Apr 1 at 17:38
  • @Fattie sounds like a Google ngrams question – Harper - Reinstate Monica Apr 1 at 17:41
  • I've done just this with my current side business. And I can tell you that receipts that include personal stuff on the personal bank account are a PITA when it comes to bookkeeping and taxes. – computercarguy Apr 1 at 17:50
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I can almost guarantee that it is because you are living abroad. When you apply, the location of your business actually doesn't matter much. They are not really loaning money to the LLC. They are loaning it to YOU, and they want to know where YOU live. So either you are leaving out personal information which is causing them to deny you, or you are including it and they are denying you because you live abroad. Just for fun, they will put your business name on the card and on the statements. This helps keeping money separate for tax or legal purposes. But it's just pretend. YOU are the debtor.

Also, please keep in mind that no matter what you think, what it says on the card, or what anyone tells you - your credit card or any other loan will (almost) ALWAYS be personal debt in your name, and will require you to personally pay it back even if the company folds. The only exceptions to this are large corporations (not LLCs) that have substantial assets and business history. It's very difficult to get un-secured debt without a personal guarantee.

  • Edited to soften wording, including "almost" and adding the last sentence.
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    SRiverNet - I think we mostly agree here - if you don't make a personal guarantee you are not liable, and if you do you are. The problem I see is that a lot of times it's not obviously to people that they are, in fact, making a personal guarantee when they sign all the forms. Not always, but mostly. The fact is that it's very difficult to get un-secured credit without a personal guarantee. Also, credit reports are not good evidence. Usually nothing is reported to the guarantor's credit unless the loan is in default. I'll soften my answer. – Michael Mar 31 at 20:50
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    @SRiverNet You are incorrect. "Business" credit cards always require a personal guarantee. Your examples are largely trade credit, which is much easier to get. This is irrelevant, the OP is asking for a credit card. A "corporate" card, which is a credit card without a personal guarantee, requires around $5 million in annual revenue. This answer hit the nail on the head. – user71659 Apr 1 at 1:38
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    @SRiverNet I went to Wells Fargo, clicked on the first business credit card (Platinum) and it says right in the agreement "An Account Guarantor is personally liable for the entire debt incurred on the Account." You're being deceptive by leaving out the word "secured". As I said, the latter two are trade credit, and I explicitly said credit cards, not trade credit. – user71659 Apr 1 at 2:08
  • @Michael - you should edit this to remove the softening words! almost, difficult etc ! It's simply not possible. – Fattie Apr 1 at 10:04
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    This. I have had an S-Corp for 15 years, and I have had lots of loans and lines of credit, and decent revenue history. Every single one of my loans/lines had to be personally secured. Of all of them, only one shows up on my personal credit report. (I suspect I could get it removed but I don't really care if it's there.) – TTT Apr 1 at 16:44
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Because the owner of the LLC is generally not personally liable for the company's debts (with certain exceptions), so your personal credit history has no bearing on the LLC's credit-worthiness (except under the circumstances outlined in the linked article, such as if you co-sign for your LLC).

Put differently, the LLC is borrowing the money and, under most circumstances, it (not you) is solely responsible to pay it back - that's one of the major points of a Limited Liability Company in the first place, in fact.

Note that most of the things listed in the article that would make your personal credit history relevant to the LLC's credit-worthiness would also at least partially remove the differentiation between your personal spending and your business spending, which is one of the stated goals of getting the card in the first place.

That being said, your goal to keep your business and personal spending separate and your desire for your personal credit history to help your LLC get credit appear to directly contradict each other - either your personal finances and business finances are separate (in which case your personal credit makes no difference by definition) or your personal credit history does make a difference (in which case you must have done something to make your personal and business credit not be separated anymore).

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    This is the actual answer. – DJClayworth Apr 1 at 15:54
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    Although LLCs are generally not personally liable for company debts, for small businesses, nearly all credit and loans from banks must be personally guaranteed, so effectively you are personally liable (for debts) anyway. – TTT Apr 1 at 16:36
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    @TTT That's true - my point was more that the OP's desire to have the credit card be distinct from his personal accounts seems to be at odds with his desire for his credit history to affect the company's credit history. Anything that would cause your personal credit history to have any bearing on the LLC's credit-worthiness would necessarily entail their personal finances being involved somehow. – EJoshuaS - Reinstate Monica Apr 1 at 16:53
  • I agree with that. But I suspect that isn't the reason for the denial. Many brand new small businesses can get a "company" credit card despite this. – TTT Apr 1 at 17:15
  • His better route would be to obtain tradelines with vendors his business needs supplies/services from, which doesn't require personal guarantees, although even this can be challenging at first with a new business. Companies like Grainer for industrial (and some office) supplies are a good start, but you have to build up at least 3 trade lines that report before your business can obtain a PayDex score, which is the business equivalent of a FICO for people, at which point it becomes easier to obtain new credit for the business. – SRiverNet - reinstate monica Apr 1 at 21:29
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  • Small businesses can't get credit of any type, there's no such thing.

LARGE business - about $5m a year in profit 10+ years - can get credit. Small businesses, LLCs, etc., can not get credit. There's no such thing.

(Note: the "business" credit card your bank offers is simply a personal card with a business name printed on it. There are no credit cards for small businesses. Huge corporations can get "corporate credit cards." )

  • Regarding a personal card, there's not a chance you can get one while overseas.

I might say, this whole page is somewhat confusing.

"Of course" everyone knows a business can't get a credit card or a loan.

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  • {Obviously HUGE businesses can sometimes borrow money but you're talking on the millions a month / established for a decade scale.} – Fattie Apr 1 at 10:01
  • I don't mind, but it's amazing this was downvoted ! – Fattie Apr 1 at 14:54
  • I didn't downvote, but I can't tell if this is a serious post or not. Your first statement is, frankly, ridiculous on the face of it. Of course businesses can get credit - that's the entire point of the bond market, for example. – EJoshuaS - Reinstate Monica Apr 1 at 15:30
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    The edit helps a lot. – EJoshuaS - Reinstate Monica Apr 1 at 15:53
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    Everyone continues to focus on credit cards and ignores tradelines, since that's what the OP would more likely be looking for. He wants "credit" for services/products his biz needs, so tradelines with suppliers fits the bill. And tradelines definitely don't require personal guarantees, although some say they're more likely to grant a tradeline if you're willing to voluntarily guarantee the debt (Staples and the Amazon 45-day NET program, for instance). Others, like Grainger and ULine, almost always say yes to new small businesses and grant at least NET-30 accounts, which is a start for him. – SRiverNet - reinstate monica Apr 1 at 21:33
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A bit of a frame challenge: Instead of trying to get credit for an entity (the LLC) without a credit history, you should be trying to build a credit history for your LLC.

You should do this in the same way as you would do it for yourself, services and secured credit cards.

In the meantime, you might want to consider pre-paid debit cards.

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    Businesses can't get stand-alone credit cards until ~$5 million in annual revenue, something that the majority of small businesses will never reach. The situation with loans is similar, even with government SBA loans. While you may get trade credit, which may be useful, if you need a general purchasing card, there's no point in waiting for something that won't happen. Build your own credit and get a business card with a personal guarantee. – user71659 Apr 1 at 2:21
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    @user71659 - this is certainly an oddball QA page! You're the only person who's pointed out that, obviously, businesses can't get credit cards (other than huge companies). – Fattie Apr 1 at 10:02
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If you applied for credit and were denied, you have the right to a copy of the information they used to make that decision (i.e., a free copy of your credit report). Step 1 would be to avail yourself of this free resource and verify that the information in your credit report is accurate across bureaus. Even if you've already pulled your annual free copy, being denied for credit makes you eligible for another.

You said you weren't trying to take on debt so you don't actually need a credit card, just a way to pay for things and to keep funds clearly separated. The most straightforward way to separate your personal and business finances is by opening a business bank account for your LLC. When clients pay you, deposit the funds into the LLC's account. Pay for your business expenses by writing checks against that account or by using a debit card linked to it. This is how a lot of small businesses do it. You have a clear separation for accounting/tax purposes, and there's no credit involved (although you might have to use some personal funds as an initial deposit to open the account).

If you really do need to borrow money to start up your business, you might want to look at the Small Business Administration's loan programs. They're designed to help small and just-starting businesses that can't qualify for traditional loans. Eligibility might be complicated if you're living abroad, so you should probably contact the SBA for details.

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I have now resorted to applying for personal cards, but am still getting my applications denied. I can remember getting spammed constantly with credit card offers, but now cannot get approved for one despite my best efforts.

When a lender wants to check your credit history, they first need to verify your identity. Part of this is confirming your address. If the address you give them is in a different country than the one in which the lender operates, the lender may simply not be able to confirm your address.

What's preventing me from getting approved for a card? Would calling be more effective in getting approved?

It's quite possible. If your current address is outside the country of the lender, you should certainly try calling and talking to an actual person. Automated systems are typically very bad at handling situations such as this.

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The root problem is that you are located outside the US. This is why no US bank wants to give you or your business a credit card.

The bank wants you in the US so you are subject to the US legal system and they can obtain judgements and garnishments against you (i.e. seizing money from your paychecks and bank accounts). It's generally impossible, or at least prohibitively expensive, for them to hold you accountable if you and your income sources are outside the US.

It is not unheard of for say, foreign students, to rack up a debt, say from credit cards or utility bills, and leave the country permanently. Unless they settle back in the US, there are no practical effects to them.

On a related note, business credit cards always require a personal loan guarantee due to the risk of corporate bankruptcy. If your company has little assets, its trivial to declare bankruptcy, shut down, and pay several hundred dollars to start a new LLC. Only companies that have around $5 million of annual revenue can expect a corporate credit card, one without a personal guarantee.

It is also notable that at $45k/year you are under the median household income for the US ($68k for 2019). You're in the lower 1/3, which will affect your creditworthiness.

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I guess if I were a bank I would not lend to any LLC that doesn't have any assets or income either. I mean, the whole point of having an LLC is to keep business losses from affecting your personal finances. This means that as a bank I would be on the hook 100% if you cant pay me back.

I bet the bank would have a different attitude if you had a business checking/savings account with them that had lots of cash in it. That particular bank probably would lend you money. Extra points if you actually have clients/income.

Anyhow, apply for a Dun & Bradstreet DUNS number. It's the business equivalent of credit reporting. This will become useful to you over time.

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