The Free Credit Ability Today Blog

You’re self employed and you have no credit, but it is not the end of the world. Here at Free-Credit-Ability.Today.com, we’ll go through the credit building process together every step of the way.But before you get started building credit there’s something you need to do first.You need to learn what qualifications mean a creditor will approve your application.Don’t apply to every credit card offer that comes in the mail or get a high interest loan. If you applied to freelance gigs with shoddy credentials again and again all you would get is a deserved bad reputation. Much like this fact of self employment, mass credit applications of poor quality negatively affect your credit standing and set back your efforts to build credit.

There are no shortcuts when you’re building credit

Trying shortcuts to build your credit when you have none are always a mistake. Mistakes just aren’t something self employed professionals can make. As soon as you check the “self employed” box, you don’t want to fail to show the expected qualifications. The connotation of a self employed professional is that you could make $10,000 one month and not even $10 the next. However, just like trillions of other applicants, you can study the qualifications and put forward your best representation in a credit application.

You Need to Know Credit Qualifications

If you will read the qualifications supplied in this blog post and finish with an honest appraisal with the provided questions, you will be taking the right steps to building credit. You can build your credit from the ground up with all the support of Free-Credit-Ability.Today.com. When you can bring together these qualifications, you can get the approval you seek from a creditor.

Credit Qualification to Know: Can you manage money?

To begin proving yourself, start with your banking history. While a checking account is not required, having an account in good standing provides credible evidence of your ability to manage money. A creditor looks to the evidence for indication of your ability to pay back your debts. A checking account in good standing shows creditors proof of your ability to manage money and presents you as less of risk for default.

Credit Qualification to Know: Do you have backups and reserves?

To further lessen your appearance as a risk, it is good to have an accessible savings account of reserve income. While others building their credit may not need to take this step, when you are self employed you have to have money that is accessible. If if you are experiencing a bad side of variable income, a creditor needs to know that you will be able to pay them all the same. A savings account says that you will be able to repay any debt for which they approve you.

Credit Qualification to Know: (The big one) Do you have the money to repay your debt?

However, before you can save any money or keep any checking accounts in good standing, you have to present the income. Proving a reliable source of income for many individuals is a start date, name, and number of an employer. For a self employed professional, you need to present your solid business model in relatively predicable earnings with a strong foundation and outlook. Self employed or not, steady income will qualify an applicant.

Credit Qualifications of Character

If you can show a creditor that you can manage money and keep earning money, they will need a few more references to your responsibility and reliability.

Credit Qualification to Know: Are you living at a long-time, reliable address?

One of the references is your residence history. With a steady address, you showcase commitment abilities necessary for credit approval.

Credit Qualification to Know: Are you capable of paying regular expenses?

A final reference for creditors is your history of an ability to pay regular expenses. Paid services such as utilities and phone bills don’t go on your credit report but they convey reliability and responsibility. This directly conveys whether you will be capable of repaying your debt to them.Developing the qualifications a creditor seeks can help lack of credit become a thing of the past. Remember to understand what creditors are looking for and look to prove that you not a risk for default.

 Appraise yourself as a credit applicant

Think like a creditor and evaluate yourself with the following questions:

• Do I have a checking account in good standing?
• Do I have income reserves in an accessible savings account?
• Do I earn solid income from my self employment?
• Do I have a stable residence history?
• Do I have recurring expenses in my name that remain in good standing?

Evaluate your answers and take positive steps to becoming the applicant you would approve if you were a creditor. Understanding the qualifications of creditors goes a long way toward meeting them, which of course goes a long way to building credit when you have none.

Sources:

• CreditMe.com Credit Guide for When You Don’t Have Credit
• FinancialPlanning at About.com Credit and Debt Management Guide

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