How to build credit as a freelancer?

Credit can mean different things to different people. You can build your personal credit score just as you build your reputation. You can build your financial credit score in a similar way. Both have reputational factors and financial factors. Both need you to be organised and focused. Both need attention and awareness. Both can impact how people see you.

If you are interested in knowing what your financial credit score is, you can use tools like Equifax or other online checking tools. If you have a good credit score, you will have multiple ways that employers can pay you, credit cards, loans, overdrafts, and you will be financially educated. 

If you want to check how your work is received and build up your credit score in regards to your personal reputation, you can use feedback from clients, scores on websites where you find work, and your Linked In Profile recommendations pages.

Gaining credit in full time employment generally means that you get a promotion, an increase in pay, additional benefits and additional responsibilities. Gaining credit in Freelancing means that you will get more clients and more referrals, and grow your reputation therefore growing your business.

Below are some ways of increasing your financial credit score:

  1. COLLECT PROOF OF INCOME  – verifying your cash flow or income shows organisation and basic bookkeeping skills and can be used as evidence if you are trying to get a loan or a credit card. Unlike regular job employees, they have a stable salary to prove their financial capacity if they provide their payslip. As a freelancer, things do not work like that especially if your income is seasonal. 
  1. CONSIDER STARTING AN LLC OR CORPORATION – If you are seriously into being a gigger, you can consider having a long-term vision for your career by registering yourself as a Sole Proprietor. Setting an LLC or Corporation for your gig career is an ultimate sign for legitimacy as you can have your own pay stub, email address, company, contact details and having your name on your own domain and your own email address adds reputational credit.
  1. SET-UP A SECURED CARD

Setting a credit card solely for your freelancing work is another way to build a good credit. You can secure the account with a deposit equal to the credit limit all while taking out a credit card in your company’s name. Having a company credit card can help with tax payments and audits, it can also give you the ability to attend training events and buy resources that you need.

  1. PAYING ON TIME – paying all your obligations on time including loans and credit cards will build and maintain your credit reputation.

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