Need Help - Business Owner Declined By Chase!

[Anonymous]

First of all, hello and greetings to all the users of myFICO.  I've been silently reading these forums for months now and am glad to be a part of the community now.

I have a little issue that maybe you can opine on....

I am a business owner in my mid twenties (business is set up as a corporation), and I have owned a personal credit card since the age of 19, with a consistent payment history.  I also have had a motorcycle loan in the past, under my name with no cosigner, paid off years ago.  My company is only two years old and has had corporate credit cards since its inception, backed by my personal credit (had to collateralize the cards with my personal credit in case the corporation failed).

I have recently been consolidating my banking, accounting, and credit cards together.  I am in the process of rolling over all of my personal and corporate checking accounts, online banking, and credit cards to a national bank - in this case, I decided to go with Chase.

Now, everything is peachy, except when I tried to open new credit cards with Chase online.  I applied for a Chase Ink card for my corporation and a Chase Sapphire for my personal spending.  The cards are to be used like my previous cards - used aggressively to harvest points for travel, and paying them off online every month in full.

I applied for both cards online with confidence last week, then received two letters for each card this week - I WAS DECLINED FOR BOTH CARDS, due to an Experian credit report which they mentioned:

1) I do not have sufficient length of credit history and card usage on file

2) I applied for too much credit at once.

Now, I think I screwed up on #2 since I was talked into getting a Macy's card 3 weeks ago to get a discount on a new watch.  I had the intention of getting the card just for the massive sale discount, then cancelling it afterwards.  I forgot that Macy's cards DO count as "Credit cards," so this was just ignorance on my part.

What I don't understand is #1.  I've had reliable credit since I was 19 years old - I've easily received Visa cards from my local bank and even a Bank of America MasterCard.  My credit score from CreditKarma, pulled tonight, is 732.  My corporation, while young, applied for and received $19,000.00 of credit in the past three years across multiple credit cards (local bank VISAs and a Costco TRUEBusiness AmEX business card). I have never abused this $19K of credit and generally only charge $1-5K a month on the cards, then pay them all off the same month.

So, why is it that my local bank loves to give me credit (personally and for my business), as does AmEX and Bank of America, whereas CHASE is giving me a hard time? 

Followup question: I am flying to NYC (I am from Hawaii) in about 10 days for business travel.  While there, I was going to open my business checking accounts in-person at a Chase Manhattan branch.  Do you think Chase would "revisit" my declined credit card apps if I applied for the cards in person in New York, or does it not matter?

Thanks for your feedback!

[Uborrow-Upay]

Hi, AgonyBooth!  Welcome to the forums!

Quick questions first...

Have you ever checked your Experian Business reports to see if any business credit is reported to them for your corp?

Have you checked your corp status with DNB?

(I expect that this post will likely be moved by a mod to the business credit section, where you may get more replies)

[silveroak]

I was a Chase business banker for years before moving to another bank. The credit card operation at Chase is run independent from their banking branch offices. Unless you have a Chase business banker handling your accounts (deposits, treasury services, merchant services and loans) you will not receive reconsideration from a branch office, whether in NYC or another city. Each branch office has a VP Manager and all have the same "powers" whether it's the main office or small office in your local mall. 

The key for you is getting the in with a business banker. That person can use your deposit relationship to push the case for a credit card. You will be asked to move everything to Chase. If your revenues exceed 10 million per year, you are a Commercial client. If you are in the 1-9.9 million range, you get to work with a small business banker. If it is below 1 million in annual revenue, you work with the branch, which has limited powers. 

Chase likes a strong deposit relationship, high score and low debt to income.

Good Luck!

[Anonymous]

Thanks for the replies!

UBorrow,

I tried checking Experian business reports online to see if my business exists in their database......it doesn't.  Am I to assume that my corporation has no business credit being that it doesn't show up in Experian's reports?  If not, how did my local bank issue me corporate cards in the name of my corporation....

As far as "DNB" - not sure what that is.  Could you clarify?

Silveroak:

Thanks for the Chase business banking tips.  My corporation does not make enough profit to qualify to have a business banker, unfortunately.  I am thinking that if Chase will not approve my credit requests I may try and get a CapitalOne card instead.

[Uborrow-Upay]

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@Anonymous wrote:

Thanks for the replies!

UBorrow,

I tried checking Experian business reports online to see if my business exists in their database......it doesn't.  Am I to assume that my corporation has no business credit being that it doesn't show up in Experian's reports?  If not, how did my local bank issue me corporate cards in the name of my corporation....

As far as "DNB" - not sure what that is.  Could you clarify?

---

Sorry for the delay in getting back to you on this!  Here's a couple of links you'll be interested in.

One of our members (Tuscani) composed an excellent primer on establishing business credit in a thread entitled "Business Credit 101".  The entire thread is quite long, but you'll get lots of info in the very first post by Tuscani.  Subsequent info in that thread may or may not be outdated to some extent, as the economic climate has changed since originally posted, and some of the companies mentioned have since adjusted their policies regarding credit.

DNB is Dun & Bradstreet, probably the best known of the business credit reporting agencies.  You should check to see if you already have been issued a DUNS number for your business.  If not, you may request one, for free (there is NO need to pay DNB for anything unless you want to, regardless of what a rep tells you in the inevitable phone calls you will receive after requesting a number).  Here's a link to DNB to both check your status (upper right corner) and request a free number (the second "Go" button on the list).

DNB evaluates your business in a couple of ways, one of which is what's known as a Paydex and the other a DUNS rating.  The Paydex is like a credit score, with 80/100 being decent credit.  The DUNS rating they issue evaluates your business stability as a whole, taking into account the size of the business by dollar volume of sales and number of employees, as well as your financial statements for the business (if made available to them).

When checking Experian or DUNS to see if you are already in their database, sometimes slight variations in your corp name will pull up a file you didn't think was there.  Make sure you try that.  However, if all you have for credit tagged with your corporate name is whatever cards have been issued by your local bank, you may not even have a file.  It is quite common in business credit for lenders or vendors to not report, or if they do report, to only report to one specific bureau.

Your local bank issued your corp credit on the basis of your PG (personal guarantee).  If your business goes south, they will collect from you personally.  These days, it is difficult to find a no PG business credit card, in part because of people who obtained these cards without actually having a business.  Since business accounts don't normally report to consumer credit reporting agencies, some folks got these cards for "hidden tradeline" purposes, to hide large balances.

Best thing to do for the moment is give a quick read to Tuscani's post, and get an overview of how business credit actually works.  I (and others, of course!) will be around for any future questions you may have.

Hope I've helped you a bit here, and  I am requesting a mod to move this thread to the Business Credit Forum, where you'll find all sorts of interesting details on lots of stuff related to business credit issues!

Uborrow-Upay

[blacklotus]

Chase "Manhattan" is just a name. Chase has banks in Manhattan but most big banks moved their credit card operations to places like South Dakota and Nevada. Just look on the backs of your card. Citi "The Citi Never Sleeps" is CP HQ South Dakota (correct me if I'm wrong). I'm pretty sure Chase was once Chase Manhattan and Citibank was actually in New York, NY. But a few years ago usery laws were passed that limits the interest rates that credit card issuers can impose on customers (including NY State)- thus credit card issuers moved their operations to other places. Since the actual Corporate Headquarters is based in states that don't have usery laws they can still issue cards with whatever APR's they choose. This would not be true if Chase was actually in Manhattan.

[Anonymous]

@UBorrow and others:

Thanks for the replies.  I will definitely try again with DNB and Experian Biz.  

[Uborrow-Upay]

Please see my reply in a related thread, it's here.

[Creditaddict]

I would call the credit department for first the personal chase card and then the ink card, they have 2 different underwriting devisions.

My other question is if you already have the amex costco card, Why would you not just look into a business gold and personal gold or zync? unless your looking for overdraft protection with the chase cards