Fluctuating income
There are certainly some great things about being self-employed – you’re your own boss, you can pick your hours and you don’t have to commute if you work from home. But it can also make it difficult to manage your money. Even budgeting can be hard if you’re self-employed as your income may vary from month to month, meaning it can be a struggle to pay some off your essential bills.
As a result, you might find that you come up against some problems when you apply for credit. Not all lenders will accept you if you’re self-employed, as they could assume – perhaps unfairly – that your fluctuating income will make it too confusing to manage repaying your credit as well as managing your other financial commitments. Lenders like to see you have a regular income so they have the assurance that you make enough money to repay your borrowing. If you can’t demonstrate that, they may be wary.