Being self-employed can be great. It means you have greater control over your own destiny and there’s no annoying boss looking over your shoulder and correcting you all the time.
Being self-employed doesn’t always have the same security as an employed position. You are responsible for finding and maintaining work and if something does go wrong, there is no safety net to fall back on.
Then there is the issue of income. It can sometimes be difficult to prove that you are receiving a steady income when self-employed and this means applying for loans, mortgages and even credit cards can be tricky. Without the guarantee of an employment contract, some financial institutions will remain unconvinced about your ability to repay any loans and this makes it difficult to obtain credit.
Of course, every lender is different and will have different criteria for lending. Factors like salary and length of employment are usually considered but will differ for each institution. Your previous credit dealings are also considered and are provided in the form of a credit rating.
Your credit rating is based upon your previous and current ability to meet repayments and direct debits. This could be anything from mobile phone bills, utility bills to memberships. If you have previously struggled to meet payments this will be represented in your credit history and even being self-employed can be a factor in your credit rating search.
What you might not know, however, is that each time you apply for credit and are turned down this can decrease your credit rating score. So, each unsuccessful credit card application makes it even more unlikely you will be approved for the next. It’s the definition of a vicious circle – but there is something you can do.
It is relatively easy to improve your credit rating in a short space of time. If you have previously been turned down for a credit card, then leave it six months before applying again. In this time do everything you can to improve your credit rating. Pay off bills, take out memberships and set up direct debits for longstanding payments.
Alternatively, you could turn to a company that offers credit cards to people who have suffered from previous bad credit.
Companies like aqua card realise that bad credit is sometimes unavoidable and that being self-employed is something that should be encouraged not punished.
That’s why they will still accept you, even when others have turned you down. Their lending criteria is sensible and fair and gives you the best chance of securing the credit you need, as well as the chance to improve your credit rating for the future.
For those who are self employed, this means there are still viable options for borrowing credit. This means that all individuals are treated fairly and equally with consumers not discriminated against because they chose to be self employed.