Freelancers, listen up! If you are wondering how to start your credit journey, you’ve come to the right place. With the world quickly moving to a ‘gig economy’, which means more freelancers are blooming every year, you don’t need to have a constant 9-5’ job to get you a credit card anymore.
As a freelancer you are at the advantage of knowing how to get things done, from legally establishing a business to getting your taxes right, you might have done it all. These factors will help you build a credit score easier than you think.
Firstly, what is a credit score? A credit score is a three-digit number that represents your history of borrowing money along with debt and the payment history. The number ranges from 300-900, 900 being your safe side. Credit is just one of the things you don’t know you need…until you need it. A good credit score interprets what your chances look like at getting a home loan or even a new credit card.
How is the score calculated?
Four key factors ultimately impact your credit score :
Payment history: Make late bill payments and you are negatively impacting your credit scores.
Multiple applications: More loans, the higher the burden of repayment in the future. The same goes for credit cards.
Length of credit history: Longer your credit history, the higher the chances of your credit score being in good shape.
Credit utilization: Stay below 50% of your credit limit. When you reach the higher side of your limit, it may indicate that you are at a high risk of defaulting.
How to have a smooth start to building your credit score?
For starters, choose a credit card that helps you spend and pay back eﬃciently. The slice credit card helps you get a 360-degree view of all your expenses and helps you manage your daily payments as well as gives you complete access to get emergency cash.
Make payments on time: Always stay punctual with paying back your dues, this will gradually help you make a better credit score. With Slice, you can convert your bills to EMI’s and pay them back monthly with zero charges. This is perfect for you to stay in the good books of lenders. No joining fee or hidden charges, making it perfect for Freelancers starting off.
Keep an eye on your credit report: Checking your report regularly will help you avoid possible inaccuracies and errors. It is a healthy financial habit to keep track of your financial movements.
Also, it is so motivating to check your credit score and watch all your hard work pay off! slice helps you keep the transactions transparent and easily accessible too with our passbook feature.
Building credit takes time, by putting in the time to practice these tips and building good financial habits you are already making progress.