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When Applying For CCs Using Self Employed...

Established Contributor

When Applying For CCs Using Self Employed...

For personal credit cards, has anyone using the employment designator of "Self Employed" had an issue where the credit card company questioned this?  Do all "Self Employed" applicants automatically get the dreaded 7-10 day review message and does the credit card company ask for financial documents?

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Message 1 of 9
8 REPLIES
Valued Contributor

Re: When Applying For CCs Using Self Employed...

I'm self-employed and have been instantly approved most of the times I've apped. Even the one time I got a "pending" message, I was approved within minutes.

 

The only thing I've noticed -- and this may or may not have anything to do with self-employment -- is that the APRs I'm given seem worse than my credit scores and clean history should warrant. Maybe there's some caution there.

 

When getting mortgages, I've had some hellacious experiences because of self-employment. But never with credit cards.

Message 2 of 9
Epic Contributor

Re: When Applying For CCs Using Self Employed...


RSCo wrote:

For personal credit cards, has anyone using the employment designator of "Self Employed" had an issue where the credit card company questioned this?  Do all "Self Employed" applicants automatically get the dreaded 7-10 day review message and does the credit card company ask for financial documents?


YES (Usually) and I don't think it's really fair... I can't say more!

Message 3 of 9
Valued Contributor

Re: When Applying For CCs Using Self Employed...

For whatever reason, lenders seem to view self employed people as a greater risk. A credit union I saw said they ask for past two years of tax returns to approve a credit card for self employed, but just ask for a paystub from anyone else. I just put full time and the name of the business, instead of self employed. I've never had a problem with that.

Message 4 of 9
Established Contributor

Re: When Applying For CCs Using Self Employed...


navigatethis12 wrote:

For whatever reason, lenders seem to view self employed people as a greater risk. A credit union I saw said they ask for past two years of tax returns to approve a credit card for self employed, but just ask for a paystub from anyone else. I just put full time and the name of the business, instead of self employed. I've never had a problem with that.


+1 

I am a self employed private commercail pilot and the above is exactly what I use.


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Message 5 of 9
Established Contributor

Re: When Applying For CCs Using Self Employed...

I'm self employed as a sole proprietor, always use my name and self employed. Never had an issue, get the 7-10 day message on occasion but one quick call to verify something not related to my employment and I am approved. 

 

AMEX seems to be fine with it as I have multiple business cards as well as multiple personal cards all using the above information. Never had to prove income to AMEX, Chase has asked some pretty detailed question about my income but never asked for proof. 

 

My business credit cards look funny as it has my name twice, once for cardholder and once for company. My employee cards are even funnier as they have card holder name and my name as company. 

Message 6 of 9
Super Contributor

Re: When Applying For CCs Using Self Employed...

I think for new business accounts, they just want to interview you.  

 

Ask what your business entails, years experience, expected revenue and anticipated spending.  On occassion, if you have a fictitious business name (LLC with different Tax Id #), they may request a bank statement with the business name and address or an IRS application form with Tax ID, etc...

 

Message 7 of 9
Valued Contributor

Re: When Applying For CCs Using Self Employed...

No question being "self empkoyed" increases your credit risk. There is a text, "The Credit Scoring Toolkit" by R Anderson that covers a lot of the factors used in credit scoring, design, and use of. It probably has a similar effect to knocking off 20 to 30 points from a FICO score. FICO scores do not use any employment info but acquisition scores, typically using FICO combined with app info,  can factor this as well as income.


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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Message 8 of 9
Established Contributor

Re: When Applying For CCs Using Self Employed...

Usually, banks will ask for two years of tax returns or other income proof. It's simply to proove your ability to pay. 

Message 9 of 9