18 y/o with credit concerns
Hows it going guys. turned 18 just a bit longer than a month ago, and I am not reported on any credit bureaus.
About a week ago I was put as an authorized user for a gold charge card. Ordered a capital one secured MC that should be coming in a week. I have 3 bank accounts, but my personal one that I use has only a few grand in it. Before the AMEX I would use my chase atm card, which I hated, no credit and its risky. Anyways, I dont want to be an authorized user, I want my own main account, and I need a Business AMEX as well. I own an LLC'd company and have my fed tax ID and the whole 9 yards.
I've been making business charges on the regular since I got my atm card. But recently they have been stepping up, and will continue to step up. My business charges will increase dramatically in the next 2 months as well. Right now at my rate I am averaging $1200-1750 a month in expenses. I file federal, state, and sales taxes, therefore I want no issues.
But that fact of the matter is, I cant even qualify for a business card yet. I am seeking advice, with my AU AMEX, Secured MC (capital one) what is the best way to improve my credit as best as possible? I'm letting my mom use my Secured MC for all of her miscellaneous expenses. (800-1200 a month)
I was in your position mainly with acquiring an American Express card of my own shortly after I turned 18 in January of 2011. My best advice (and I know you don't want to hear this) is to wait approximately a year.
Background: I don't have the business assets you do, nor the income. Throughout the experience below however, I was employed part time working at a hotel.
I applied for a bunch of different CC's (A&F Store card, NM Incircle Card, Amex Green) the day after my birthday, and each card, despite their different banks and different bureaus used, said they couldn't verify my identity. It turns out, your credit "profile" takes about 3 months to form and establish with the 3 bureaus. Waited a few months, and in June 2011 I applied for an Alaska Airlines Visa Credit Card through Bank of America (whom I had a relationship with), and was approved, secured, with a 500CL.
In July 2011, going off to college, I finally convinced my dad to make me an AU on his Business Platinum account. So throughout college, I used the Visa card sparingly, charing no more than $150 and paying it as soon as it report, to show I was using it.
January 2012 I opened an Express store card to increase my credit limit, despite a limited credit history. Still, the higher limit bumped up my score. Keep in mind, this entire time, the Business Platinum AU card was paid in full, on time, always by my father.
June 2012, I get an email from Bank of America stating that my account was being un-secured and the deposit was returned (again, no more than 30% reporting utilization).
August 2012, I decided it was time. I applied for the Delta Skymiles Gold card, reporting the income according to what the ADP online system for the hotel said I made annually, and I was approved with a $2500 limit. Next, I saw that if you get approved for 1 AMEX you will usually get approved for 2. And given that I was just approved for an AMEX revolver, I decided I would embark on my quest for a Centurion and apply for the Premier Rewards Gold Card as well. Applied, and... Approved! Haven't been that excited for a while.
So, in August 2012, I had the $500 Visa, $250 Express, $2500 Delta Gold AMEX, and no limit PR Gold.
THEN called B of A in September to request $2,500 limit...approved.
THEN, called AMEX, and they were able to back-date my two August 2012 personal cards to the 2011 date I first got the AU Business Platinum card, making my average account age much much older.
what I learned? time is key! if you're going to be making lots of business purchases, I highly recommend the Business Platinum, Delta Platinum for Business or the SPG for Business card if you travel. Lots of options, Business Platinum perks are awesome if the annual fee doesn't scare you away.
Yeah I dont mind using as an authorized user, because I have my checking account linked to my card and I pay it, but its not building me any credit. I also need a business card for business purchases, I do not want to have a lawyer have to transfer my purchases for my taxes. I understand it may take a while. I need AMEX for their high spending limits and I hate the concept of credit cards. I honestly believe you should not buy what you cant afford, and i hate billing plans.
Kind of an off topic question for BrenGuard: if you have your business, do you HAVE to have a business Amex, or could you use a personal?? (Congrats btw on your business, hope you succeed!)
Our expenses our rather large, this week I spent 1700 between 2 designers. Once we start buying and selling inventory its going to get to the point where Im writing checks out to AMEX to credit my account for higher spending. Although I do charge on my personal AMEX, I would much rather prefer to have a business card for added security, especially when it comes to taxes. I will be traveling from jersey, to vegas, and various parts of california frequently, so I will be getting a personal and business AMEX Plat.
Originally Posted by Moneytalks
Congrats on your business! I think that's really great. I also own my own (single-member) LLC. I passed the magic three-year mark in August.
I have the LLC because I want to keep Business Stuff separate from My Personal Stuff, and Our Family's Stuff. Straightforward, right? But every time I deal with financial institutions-- banks, credit cards-- they insist on blurring that line.
For example-- the LLC owns a totally paid-off building, which is put up as collateral against a loan. But even though that building is totally paid-off, I still have to guarantee that loan personally, myself. And because I have no "income" (since right now, everything is being fed back into the LLC), my husband has to guarantee me. Which is exactly what he was wanting to avoid-- getting him involved on paper-- and why we created the LLC in the first place.
Or when I applied for a Lowe's card (GECRB) for the biz, because we had a bunch of renovations coming up, and the 5% off would be helpful to the bottom line. Even though my biz had celebrated its 3rd birthday, I still had to personally guarantee the card myself. And I got turned down for a Lowe's card, because whatever they looked at, they didn't think I showed sufficient credit history. (Paid-off student loans, paid-off mortgage, another mortgage with perfect payment history, a cc with 11 years of history, and a credit score north of 800.)
So-- long story short (too late!)-- as much as we want to keep our business and personal lives separate, the banks and card issuers are making that impossible. Good luck with cultivating your own credit history, and keep good records, and use a good CPA, and see what time brings. Focus on making yourself look desirable, because you can't disconnect yourself and make your business stand on its own feet and be accepted for its own merits. Good luck!
Does it have to be Amex all together? My sister has a business Citi card. Idk how that compares to other business cards but her credit history wasnt "excellent" and she got approved.