Can working from home affect your credit worthiness?
Unfortunately, potentially it can, yes. Many lenders, credit
card companies and other credit agencies use the services of the same agency to
perform credit worthiness checks.
One of their criteria is to compare
your work and home phone numbers and, unless you are self-employed, you get a
"black mark" if they're the same. (They think you're not really in work when
you're claiming to be). This can clearly impact homeworkers - so it's important,
when applying for any form of credit, by any means, to use a distinct work
telephone number. Ideally you will have a separate line for your work anyway, so
use this - EVEN if the loan is for entirely personal purposes.
If your
employer hasn't provided such a number, look for one of the many free- or
low-cost providers of 0845 and other redirectable numbers. In the absence of
that, give your employer's head office phone number as your work phone number.
Finally, this can even impact freelancers working through their own
limited companies; they will not declare themselves as "self employed" and thus
be eligible for this "duplicate number" check; so again, use different numbers
if you possibly can.
Could I be affected?
• If you work from home,
AND
• you are NOT self-employed (even if you're a director or employee of
your own limited company)
How do I avoid it? (When completing loan or credit
forms, whether in writing, online or by phone)
• Correctly give your home
telephone number
• Make sure you give a DIFFERENT telephone number as your
work number - use a dedicated line, or your employer's head office
number.
In due course the credit agencies should cotton on to the fact
that many people legitimately work from home, and this test may be dropped from
their scoring rules. If you think you've been unfairly declined credit or a
loan, contact your loan provider and clarify that although you work from home,
you ARE employed, and give your employer's contact details for
verification.
By Derek Pattenson, Small Office Solutions Ltd.