NFIB

Getting Credit When Self-Employed
03/ 07/ 2002


Do you wince when asked on credit applications whether you're self-employed? If so, it's because you're aware that being self employed is viewed as an additional risk by many lenders. In today's Workshop, Jeff Moses shares a few ideas on how to overcome this stigma.

The easiest way around the problem is to never categorize yourself on a credit application or formal document as "self employed." Instead, list yourself as "employed," and write the name of your own company whenever asked for the name of your "Employer." If you haven't yet formed your own company, you can either incorporate or simply go to the bank and start an account under your business name.

Technically, you would be an "employee" of your own company only if you have a corporation. If you're a sole proprietor or in a partnership, you're really more of an "owner" or "partner" than an employee. Even so, listing your own company as your employer is not illegal, and few people will argue with (or even care about) your terminology.

Use your company name on your business card, with yourself listed as "President," "CEO," or "Founder and President." Many well-known and wealthy individuals are owners of their own firms, and they certainly don't list themselves as "self-employed."

During business hours always answer your phone using your company name, or your own full name. This is much more professional that just saying "hello," and it allows you to present yourself as being employed by your own legitimate business.

Remember, even if you're a sole proprietor, you may already have put in place a series of credit-related purchases and loans that can serve to strengthen your credit worthiness. Gather and keep on file all records that support your status. These include credit card payments, car payments, mortgage or rental payments, and payments on leased or owned equipment. And don't overlook your receivables outstanding, which can help show that your business is ongoing and profitable.

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