Career Testing
Career Testing
Career Testing
version 2, draft 2

How to Develop a Credit Record as a Freelancer

A good credit record is important. Many freelancers believe that they cannot build a credit record due to their work status. This is anything but the case. Freelancers have to keep income records, whether it is a one-time client or a recurring client. This is your proof of income. PayPal does count as you can show your invoices sent and payments received.

Use an Invoicing System to Prove Income

It is important to keep track of your earnings and rates for business purposes. One of the best ways to do this is by using an invoicing system. Keep in mind that using PayPal invoicing is quite convenient but there are small fees taken from the payment. These can be written off for tax purposes so keep a good record of every one of them.

There are other invoicing systems available as well. Many of them allow for credit card payments, deposits into your traditional bank account or the use of other payment services. Select the service that best meets your needs.

These systems help you establish proof of income

Provide Statements to Creditors of Income Reports

When you apply for a credit account, living accommodations or even a car loan, proof of income must be supplied. This is when you would print off your paid invoice statements or payment history from PayPal or any other service you use for invoicing. This establishes that you do, in fact, have steady income that suffices the payments required for the type of account you wish to establish.

Not being on someone’s payroll does not mean that you cannot build credit.

Verify Associations with Websites Worked For

If you work for websites, content mills or others regularly, ask them to complete an independent contractor letter. In this letter it would state that you do complete work for them on a regular basis and how long you’ve been with them. The amount that you make should also be included in this letter.

This also aids in establishing proof of steady income.

View your Existing Credit Record

It is best to view your existing credit record. Various businesses, including cable/Internet service and other utility providers, will list if you have missed a payment or have been late. Any type of bill you have ever had can be listed here, including medical bills. When items go unpaid, negative marks are entered into your credit report. If your score is low due to unpaid bills, contact the creditor listed to make payment arrangements.

If you have no credit at all, it is best to start with something small that you can afford each month to establish credit.

Obtain a Cell Phone and Credit Card

Consider getting a cell phone or credit card. A cell phone is the easiest way to establish credit. Pay the bill on time or early every month and your credit report will show a good rating. Another option here is opening a credit card. This revolving credit is not for you to go and spend like crazy with. It should be used for small purchases like groceries or fuel for the car. Pay the balance in full when the statement arrives so that your credit report remains in good standing.

Establishing credit is important for all adults. It is the way that society is able to purchase homes, purchase cars and renovate homes. Regardless of your occupation, there are ways to prove your income to obtain credit accounts in the effort of establishing a credit history. Some creditors may try to tell you that they don’t work with self-employed persons, but once you can prove your steady income, their tune often changes.

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