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Can you use an EIN number for credit purposes?

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Quick Answer

An independent business can use an Employer Identification Number for credit purposes, such as applying for a credit card, Entrepreneur explains. This allows business owners to acquire credit both professionally as a business and independently. An EIN is the business's account number with the IRS, and financial institutions use the number the same way a Social Security number is used to extend credit

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Full Answer

Independent businesses can legally establish credit under the company's EIN, Entrepreneur says. There are credit reporting agencies that keep track of a businesses' credit history. The major credit reporting companies are Experian Business, Dun & Bradstreet, Business Credit, USA, and Equifax Business.

When a business applies for credit, the financial institution evaluates the creditworthiness of the business owner and the business before extending credit, Entrepreneur advises. Business owners may benefit from applying for business credit under the business EIN as opposed to their personal Social Security number in that they are not risking their personal credit to have a lower credit score.

However, an EIN cannot be used in place of a business owner's Social Security number to apply for credit for the business owner on a personal level, the Federal Trade Commission warns. And it's against the law for someone to obtain an EIN under the false pretense of being the owner of a business.

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