Help! My bank won't issue my new business a credit card!

As a new business owner or an emerging entrepreneur, the last thing you want is for your bank to refuse you a business credit card. However, these things do happen and, before you try again or apply elsewhere, the most important thing to do is to try and work out why it happened. Once you have ascertained the reason behind the bank's decision, you can then take steps to make sure it doesn't happen again.

Firstly, it may be worth considering the seemingly simple things; many a business has had their application for a business credit card refused on the grounds of inaccurate information. This most commonly happens on the application form and, in some respects is something we should be grateful for: if someone is trying to get a credit card in your name and the information supplied leads the bank to suspect that this is the case, then you would be delighted that their application has been uncovered and refused. Because of the rise of card fraud and identity theft, card providers have to be pretty strident in their appraisal of applications. It is worth checking and double-checking the data you submit on your form as even the most seemingly insignificant mistake can slow down or negate a business credit card application.

You might also want to reconsider the type and amount of credit you originally asked for. What might seem reasonable to you might seem outlandish to others, so it is wise to ask yourself how the business credit card will be used, what for and who by. Calculations based on your company's turnover on a monthly basis will give you a clearer idea of just what level and type of credit your company actually needs.

If you have never applied for a business credit card before, the lender's refusal of a card may also have something to do with your personal credit history; without any other reference point on which to base their decision, banks will use your personal credit score as their yardstick. If your credit rating is good, you will be offered more types of credit. If your score is negative, the reverse is true. Researching your credit score is a prudent move; you may have been the victim of erroneous information and can have that corrected. Alternatively, you may have experienced negative credit habits in the past, but there are steps you can take to improve your credit score, such as paying-off outstanding debts. Your credit score is a rating that reflects your spending and credit habits, when compared with the same habits as the rest of the population. It gives lenders a rough idea of the risk involved in lending you money. There are three main credit agencies compiling this data: Experian, Hyperion and Equifax. You can apply for a detailed copy of your credit rating either by post or online, for a nominal fee. As we know, your application for a card is tied in with your personal credit score and it may have something to do with your bank declining your application.

Do remember that you don't have to be loyal to your personal bank; shopping around can provide you with many benefits and other institutions may be more amenable. Banks are not the sole issuers of business credit cards these days; supermarkets and building societies can also offer them and may take a different view of any negative status you have incurred. Finally, it is worth considering that a bank does not want to lose your custom. Contacting your credit card provider and asking why the application was refused can put a better light on your situation and allow you to prepare to do it again, successfully.