How Can I Build My Credit As A Self-Employer?

By Dave Nyam •  Updated: 02/20/24 •  5 min read

In South Africa, a strong loan rating is a key to financial freedom, especially for independent workers. It is not just a number but an epitome of your financial discipline and credibility. A high or low score increases one’s appeal for competitive interest rates and attractive loan offers targeted at freelancers, small business owners, or independent contractors. This could, after all, pave the way into a home, aid in a financial emergency, or maybe even dictate the terms of a credit card. Though the way to earn credit for salaried people is often structured, it may seem not so for the self-employed. However, self-employed individuals can build a solid credit score

with the right strategies. Let’s explore how.

How Can I Build My Credit As A Self-Employer?

A good rating gives one as an independent worker the best bargaining power while accessing better deals from financial institutions—such as lower interest rates, higher loan limits, better interest terms on savings, and more favorable overdraft terms. Here are the basics on how to get your credit score up in South Africa:

Does Being Self-Employed Impact My Credit?

Being an independent worker does not in itself have a direct bearing on the loan rating in South Africa. However, irregular cash flow usually affects one’s credit score through missed bills and loan repayments. Under it, lenders sometimes regard self-employed people as having a higher credit risk, which may reflect the same in the terms applied to the credit provided. Accordingly, financial discipline by self-employed people is key to developing and maintaining a good credit score.

Can Self-Employed People Apply For Credit Card?

Yes, independent workers in South Africa can apply for a charge plate. An original ID doc, the latest income slip, and a three-month bank report are required when filling out the form. Minimum salary required: R5,000 for salaried persons or R10,000 for self-employed clients. And it is in a credit card where money could instantly be available to access on the spot, something valuable to the whole spectrum of people, from salaried to the self-employed.

Do You Need To Be An Employer To Receive Credits?

In South Africa, employment is not the only measure to get credit. Lenders are more interested in your constant income and being able to pay back. Even when you are an independent worker or unemployed, you could also be eligible for advances so long as you show constant earnings. Nevertheless, employment surely provides some sort of stability in life hence, it has an impact on credit terms. Thus, it is not a strict prerequisite but influences your credit qualification.

Which Bank Offers Loan For Self-Employed?

There are several banks in SA where one can apply for a loan, whether one is self-employed or not. Some institutions that give overdrafts to self-employed individuals are FNB, Absa, Standard, Nedbank, and Capitec. Various advances usually support such, from personal credits to business overdrafts to revolving loan facilities. The amounts of loans, terms, and interest rates can differ from one bank to another and surely will depend on one’s credit profile. As per the criteria, age and certain minimum salary details will also be considered. Generally speaking, you should be about 18 years old, earning between R2,000 and R3,500 monthly, and must have a good credit score.

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