I registered my LLC last year and got an EIN, but I haven't built any business credit yet. I tried applying for a business credit card at my local credit union and got rejected because they said my business has no credit history. I've been operating for about 8 months with steady revenue (around $5k/month), but I guess that doesn't show up on a credit report. What's the actual first step here? Do I need a business credit score before I can even get a card, or is there a way around this?
Business Credit
My business has an EIN but no credit history
Classic catch-22. You need credit to get credit. The usual starting point is a business bank account and then a secured business card or a store card at places like Staples or Home Depot. Those Report to business bureaus (Dun & Bradstreet, Experian Business, Equifax Business) and don't require a score upfront. Also make sure your EIN is actually on file with D&B — you can request a free DUNS number if you don't have one tbh.
Secured card is the way. I used a $500 secured business card from my credit union for six months, paid it off every month, and then got approved forr an unsecured one. Painful but effective.
Wait, do you actually need a business credit score? For a lot of small businesses the owner's personal credit is what gets checked anyway. My LLC has an EIN but every card I've applied for pulled my personal score, not the business one. Unless you're going for net-30 vendor accounts or bigger lines, the business bureau file barely matters at this size
This is the part nobody tells you: EIN ≠ credit file. An EIN is just a tax ID. D&B and the others don't automatically create a file for you. You have to either get a DUNS number or have a tradeline reported under your EIN. So the credit union wasn't lying — there's literally nothing to look at.
Right, and to add to that — the personal guarantee thing. Most small business cards are personally guaranteed anyway, so the bank is looking at your personal score plus the business entity. If your personal credit is thin too, that's the real blocker.
lol 'business credit' for a 5k/mo LLC. Just use your personal card and keep the books clean. The whole separate business credit score thing is mostly a product sold to people who think they need it, though.
That's a pretty cynical take. It does matter if you ever want a business line of credit or a leas or vendor terms without signing a personal guarantee. Building the file early is cheap. Why not.
OP, what did the credit union actually pull? Ask them. If it was a personal pulll and your personal score is decent, the issue might just be the underwriter's policy on new entities. Some CUs want 2 years of business existence regardless of credit. In that case a different lender solves it
They said it was a business pull, not personal. Which is why I was confused — apparently they pulled a business report that came back blank. I'll ask about the secured card option and look into the DUNS thing. Also didn't realize the EIN doesn't automatically create a file, that's probably the whole problem.
If it was a blank business pull, that confirms it. Get the DUNS, open a business checking account if you don't have one (some banks report to bureaus), and grab a secured card. Six to twelve months of on-time payments and you'll have something to show. It's not fast.
One more thing — be careful about those 'business credit builder' services that promise to boost your score. Most of them just charge you to fill out the DUNS form yourself. It's free.
Seconding the free DUNS thing. Took me like 20 minutes online. The paid services are a racket.
Yeah, and once you have the DUNS, check your file every few months. D&B will happily sell you monitoring but you can request a free report annually. Errors are common and fixing them is a whole other thread.
Honestly if you're at 5k/mo steady, a local bank that does relationship banking is your best bet over any online lender. Walk in with your P&L and bank statements. Underwriters at small banks can override the no-score issue if they like the cash flow.