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Freelancing is something that more and more people are learning the joys of, as there are a lot of benefits to be had. You’re working with your own hours on anything that you choose, and there’s no one to tell you what you should and shouldn’t do. Of course, like everything good, it still comes with its downside. You’re not technically a business, and whether or not you’re financially stable can be difficult for banks and credit companies to tell due to everything being personal.
Choose the right lenders
If you ever need to take out a loan or something bigger like a mortgage, but you’re unable to because of your credit score – you need to choose another lender. Lenders like The Change Company are invested in making sure that freelancers or others with risky seeming income are able to get the loan that they need. You don’t need to let how your financial stability looks on paper weigh you down when there are other options for you to pick from.
Log everything you earn
If you can collect as much proof of your income as possible, then you have a way of showing any future lenders how secure their money would be in your hands. It can be hard to prove your income if you’re not registered as a business, so if you can keep proof of transactions like invoices – you’re on the right track. If you were working for a company, you could simply just show your paychecks, but as that’s not an option; you’ll just need to collect the evidence yourself.
Register as a business
It might sound like a big deal to register yourself as a business, but there doesn’t need to be many changes to do so. If you want to be able to easily verify your earnings, you could register as an LLC. A lot of freelancers prefer this option as it’s easy to do, and your income is logged as soon as you start earning money. If there are any clients out there that would view a business more favorable than a freelancer, you also have that benefit.
Take out a credit card with a cosigner
If you’re unable to take out a credit card due to your income looking unstable on paper, then you should consider asking someone who trusts you to cosign the card with you. If the lender knows that the person who appears to be financially stable is also liable for the card payments, they’ll have no problem with signing it off. This will be your chance to prove that you’re able to keep up with payments consistently and that you’re not a financial liability.
You should look into improving your credit as soon as possible, as you’ll want to make sure that you’re able to take out loans when you need them. The last thing you want is to be turned down by lenders when you’re in desperate need of a loan!
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