Credit cards for the self-employed

If you’re self-employed or run your own business, it may be more difficult to be accepted for a credit card, but it’s still possible to get one. Read our guide to find out what you need to know before you apply.

If you’re self-employed or run your own business, it may be more difficult to be accepted for a credit card, but it’s still possible to get one. Read our guide to find out what you need to know before you apply.

Rob Silvey
Money expert
minute read
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Posted 9 JANUARY 2020

What are self-employed credit cards?

While there are no specific cards for the self-employed, some credit card providers will still accept applications from self-employed people. However, it can be harder to be accepted for a credit card if you’re a freelancer or run your own business. Without the security of a fixed regular income, you can be seen as a higher risk to a lender. People considered a higher risk also include those with a thin credit file, low income or bad credit history.

Keeping personal and business finances separate

If you’re self-employed, it’s best to keep your personal credit score and business credit score separate, by applying for any credit for the business under your company name and any credit for personal use under your own name. This will prevent your personal credit use impacting your business credit score and vice versa. Some credit card providers offer credit cards specifically for business use.

How do I know if I’m eligible for a credit card?

It’s important to understand what the lending criteria is for most providers to ensure you’re eligible for a credit card. If you’re self-employed, many providers will be interested in how steady your income is and others will be interested in your credit history – how successful you’ve been in paying off previous debt and whether you’ve missed any payments.

To avoid applying for credit cards that you could be declined for, it’s important to use an eligibility checker. This will perform a soft search on your credit file (which won’t be visible to lenders) and will indicate what cards you’re likely to be accepted for; a soft search won’t impact your credit score.

What will I need to apply for a credit card if I’m self-employed?

If you’re self-employed, you’ll need to provide additional documents when applying for a credit card. These include:

  • Proof of income: you’ll typically need to show documents that demonstrate a steady income in the past two years. It can be a tax return, a profit and loss statement, or anything else that shows you have regular money coming in.
  • A good credit history: this shows lenders that you can manage debt effectively, by not going over your credit limit and keeping up with your repayments. The better your credit history, the more likely you’ll be approved.
  • Savings: these can support your case by showing that you can manage your money, even if your income fluctuates throughout the year. This demonstrates to lenders that you can keep up with your minimum repayments.

What if my credit card application gets declined?

Rejected applications may have a negative impact on your credit file. Your application might be declined if:

  • Your outstanding credit balance is too high
  • You have an unstable work history
  • Your annual income is too low
  • You have a limited credit history
  • There are late payment charges on your credit file
  • You’ve applied for credit too many times in a short period of time

Read our guide to what to do if your credit card application has been declined.

What can I do to improve my chances of being accepted?

There are steps you can take to reduce the risk of being rejected by credit card providers if you’re self-employed, as lenders test stability in more ways than just your income. These include:

  • Living at the same address for longer than three years
  • Using the same bank for a long period of time
  • Being on the electoral roll
  • Managing your household bills

Read our guide to building your credit score.

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