Contractor struggling to get a loan

gazzaman28

OK, so the fact is that I've spoken to Tesco & Sainsburys and been declined loans due to me telling them I'm a contractor - will that now be recorded on my credit file and effectively go against me in any future application from anyone?

Is my bank likely to be any more sympathetic or will they just access the same credit file - in which case should I cancel my appointment tomorrow to avoid getting into deeper mud?

I've not got a mortgage at the moment but will be looking at getting one in about a year's time - is anything i'm currently doing likely to jeopardize this?

Sorry if these questions are dumb, but it's all new to me, I've never had a mortgage before and every loan I've had up until now has been given no questions asked.

housebuyer_abc

gazzaman28 wrote: »

OK, so the fact is that I've spoken to Tesco & Sainsburys and been declined loans due to me telling them I'm a contractor - will that now be recorded on my credit file and effectively go against me in any future application from anyone?

Is my bank likely to be any more sympathetic or will they just access the same credit file - in which case should I cancel my appointment tomorrow to avoid getting into deeper mud?

I've not got a mortgage at the moment but will be looking at getting one in about a year's time - is anything i'm currently doing likely to jeopardize this?

Sorry if these questions are dumb, but it's all new to me, I've never had a mortgage before and every loan I've had up until now has been given no questions asked.

Okay so I've been a LTD contractor now for about seven years, so I've got a bit of an idea what you are going through.

Firstly, don't lie on these applications - it will trash your credit rating if you are caught, not to mentoin immediate repayment requests etc

So less than three months into any job you are seen as a risk, the fact that the job may not go on past the three months is a major RED flag. Remember that when contracting the customer always 'unofficially' tells you they will be extending. This is so that you don't look for somewhere else and they can wait until the last minute to make the decision. Also if you check your contract they can terminate you anytime they want, take a look at the small print, although they have to give notice the amount of 'get-out' clauses makes the notice irrelevant normally.

Next umbrellas, they don't care about your notice period so if big bank A terminates your contract the umbrella cares more about their relationship with them than you, and therefore says OK! You can;t go after the client for notice period because the contract isn't with you, it's with the umbrella (if it isn't you've entered into a very dodgy tax-evasion scheme), you can't go for the umbrella because their contract with you says they will pay based on receipt of funds - they haven't received any they don't pay.

Always go limited, it gives you more power, and after 36 months you have a full-recognisable trading history.

HOWEVER you are with an umbrella at the moment, most of these have their own Financial Products introductory arms, ask them if they can put you forward to a friendly finance institution.

Bottom line however is that contractors struggle to get credit for many months (even years) after setting up. It's always easier to justify if you left to start up rather than started up after being made redundant. Do you see the difference here.

Option One

Skills in demand so left to be own-boss, make more money

Option Two

Lost job, couldn't get another so got a contract

Which of the two looks more appealling??

Good Luck though, and welcome to the contracting world, if you do it right you'll never go back