Credit Card for Self-Employed (< 2 years)

edited 30 November -1 at 1:00AM in Credit Cards
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ScroogeMcSwanScroogeMcSwan Forumite
12 Posts
edited 30 November -1 at 1:00AM in Credit Cards
Second time writing this as the Preview Button doesn't work!


I recently applied online for a credit card in Yorkshire Bank (Clydesdale Bank / National Australia Bank in disguise). I realise they're likely not the best in terms of offers by the way, but it was for simplicity's sake. It said it could not automatically make a decision, and I'd have to go to the branch.



I expected they'd probably want to see my accounts, which is fair enough, it's not a salary. I had already had them prepared because I'm moving house and needed them for my mortgage application.


When I got there, they said they can't give me a credit card because I don't have 3 years worth of self-employed accounts. They said to come back in 2 years. :D This was a little surprising because I used to have an American Express card, which I applied for and received when I'd been employed for less than a year, and on a smaller salary!


So basically, what credit card will work for me here? Is this a widespread policy, or is it just this bank? I only have accounts for the last financial year, showing a healthy net profit. I don't want to damage my credit score(s), which is in good standing going by ClearScore and Noddle/Credit Karma.



My main uses will be to be spread out one-off payments, e.g. new couch, and to cover any potential temporary short-falls caused by unpredictable payments, as I'll be spending more and working less in the next few months, so the ability to transfer money or withdraw would be equally handy too.



Thank you all in advance!
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Replies

  • CandyappleCandyapple Forumite
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    I don't want to damage my credit score(s), which is in good standing going by ClearScore and Noddle/Credit Karma.

    Lenders do not see your credit score - it's a marketing tool created by credit reference agencies used to sell you their premium services so please ignore it.

    My main uses will be to be spread out one-off payments, e.g. new couch, and to cover any potential temporary short-falls caused by unpredictable payments, as I'll be spending more and working less in the next few months, so the ability to transfer money or withdraw would be equally handy too.

    Sounds like you would need a money transfer card. Enter your details below and see what the checker says:
    https://creditcards.moneysavingexpert.com//money-transfers
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • zx81zx81 Forumite
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    You'll need to lower your sights a little. You can probably get a sub prime card, but try an eligibility check to see your options.

    Credit scores aren't used in the UK, so disregard anything Clearscore, Experian or Credit Karma tell you. However, do check that the data on each is correct.

    In the meantime, work on your savings, as the sort of card you'll get will charge a lot of interest if you don't clear in full. Withdrawing cash is also a very bad idea.
  • PRAISETHESUNPRAISETHESUN Forumite
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    In my experience, its usually a bank-to-bank thing. Some banks are fine with less than 3 years history whilst some are adamant about having it. You'll probably have to wait if you have your heart set on that particular card, however there are plenty of alternatives as I'm sure you're aware. Unfortunately there won't be a jack of all trades card that will be useful for every situation (eg. 0% purchases, 0% BT and 0% MT all in one) so you might have to compromise based on what you expect the card to most likely want to do.

    Also as above ignore your "scores" and focus on building positive credit history. Keep whatever cards/accounts you have in good standing and eventually your limits will improve and you'll be eligible for better offers
  • K80_BlackK80_Black Forumite
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    It's worth both using the eligibility checkers and having a Google for the ones that don't show up on them (I like Amazon for subprime for example, which isn't on most checkers) - if you have limited account history you may need to get multiple cards with smaller limits geared towards different things. Just remember not to spread yourself too thin, or make too many applications in a short amount of time. Happy hunting!
  • Lenders do not see your credit score - it's a marketing tool created by credit reference agencies used to sell you their premium services so please ignore it.
    I absolutely agree, I didn't mean to give them any credence. I suppose I was using it as an analogue for credit history. Lenders can definitely see credit card application rejections which could harm me in the future, which is really what I'm trying to avoid. I don't care about scores themselves.

    Sounds like you would need a money transfer card. Enter your details below and see what the checker says:
    [Removed link]
    I did so, thanks. MBNA is suggested at 95%: Are they to be avoided or OK, in your opinion? Looking elsewhere on here, the consensus seems OK.
    You'll need to lower your sights a little. You can probably get a sub prime card, but try an eligibility check to see your options.

    Credit scores aren't used in the UK, so disregard anything Clearscore, Experian or Credit Karma tell you. However, do check that the data on each is correct.

    In the meantime, work on your savings, as the sort of card you'll get will charge a lot of interest if you don't clear in full. Withdrawing cash is also a very bad idea.
    I don't need an American Express again, nor am I expecting it, but I would hope to get something more desirable than a sub-prime card, as I have a good credit history in all respects (previous credit card, mortgage, bills, etc. with no issues). The only difference is I no longer have a salary, and have clients directly instead of through a company. I'll definitely clear the card! I don't even intend to use it too much, only for large purchases to keep a steady cash flow or for money transfers (which I realise are different needs). I see now withdrawing seems quite punitive. Why is there a distinction between money transfers and withdrawing? Why does it matter to them if I move money to my bank account to withdraw, versus withdrawing directly?
    In my experience, its usually a bank-to-bank thing. Some banks are fine with less than 3 years history whilst some are adamant about having it. You'll probably have to wait if you have your heart set on that particular card, however there are plenty of alternatives as I'm sure you're aware. Unfortunately there won't be a jack of all trades card that will be useful for every situation (eg. 0% purchases, 0% BT and 0% MT all in one) so you might have to compromise based on what you expect the card to most likely want to do.
    Very useful, thanks.

    Out of interest, would it be advisable to get one of each? One for purchases and one for potential money-transfers. Would it be a bad idea to apply at the same time for these?

    Thank you all again.
  • zx81zx81 Forumite
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    Why is there a distinction between money transfers and withdrawing? Why does it matter to them if I move money to my bank account to withdraw, versus withdrawing directly?

    Cash withdrawals are generally interpreted as signs of higher risk behaviour, especially if not cleared in full each month, due to their higher cost.
  • zx81zx81 Forumite
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    Lenders can definitely see credit card application rejections which could harm me in the future, which is really what I'm trying to avoid.

    They definitely can't.

    They only see searches and accounts, not the outcome of the search.
  • CandyappleCandyapple Forumite
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    I did so, thanks. MBNA is suggested at 95%: Are they to be avoided or OK, in your opinion? Looking elsewhere on here, the consensus seems OK.

    MBNA are a good card provider, I have used them for years now. However, since they have been taken over by Lloyds last year, the only way you can check what cards you are eligible for is if you go through their own website's checker and apparently they tailor the card/offer based on your credit history so none of us here know exactly what kind of card you would be offered.

    I see now withdrawing seems quite punitive. Why is there a distinction between money transfers and withdrawing? Why does it matter to them if I move money to my bank account to withdraw, versus withdrawing directly?

    Money transfer cards, just like 0% balance transfer and 0% purchase cards are promotional cards. Hence why if you get a money transfer card and use it to withdraw cash to your bank, it won't be reported in the same manner as if you were doing that with a "normal" credit card - it would be reported as being promotional on your credit files. If you withdraw cash on a normal card, it will appear that you are desperate to lenders due to the high fees and charges that go along with it. It's just a big no no, never withdraw cash from a credit card UNLESS it is a special travel credit card and you are using it overseas (e.g. Halifax Clarity) or you specifically have applied for a 0% money transfer card.

    Out of interest, would it be advisable to get one of each? One for purchases and one for potential money-transfers. Would it be a bad idea to apply at the same time for these?

    Yes, make sure you keep them separate. One money transfer card and one purchases card. Yes apply for them at the same time, it makes no difference.
    I'm a Board Guide on the Credit Cards, Loans, Credit Files & Ratings boards. I'm a volunteer to help the boards run smoothly, and I can move and merge threads there. Any views are mine and not the official line of moneysavingexpert.com
  • K80_Black wrote: »
    It's worth both using the eligibility checkers and having a Google for the ones that don't show up on them (I like Amazon for subprime for example, which isn't on most checkers) - if you have limited account history you may need to get multiple cards with smaller limits geared towards different things. Just remember not to spread yourself too thin, or make too many applications in a short amount of time. Happy hunting!


    Thanks, this is useful!
    zx81 wrote: »
    They definitely can't.

    They only see searches and accounts, not the outcome of the search.
    If, for all to see, a credit card company leaves a search on your file, and then no account follows it up, it seems fairly likely it would be assumed as a rejection, fair or not, no? Just because it's not explicit doesn't mean it wouldn't look bad.
  • Candyapple wrote: »
    MBNA are a good card provider, I have used them for years now. However, since they have been taken over by Lloyds last year, the only way you can check what cards you are eligible for is if you go through their own website's checker and apparently they tailor the card/offer based on your credit history so none of us here know exactly what kind of card you would be offered.




    Money transfer cards, just like 0% balance transfer and 0% purchase cards are promotional cards. Hence why if you get a money transfer card and use it to withdraw cash to your bank, it won't be reported in the same manner as if you were doing that with a "normal" credit card - it would be reported as being promotional on your credit files. If you withdraw cash on a normal card, it will appear that you are desperate to lenders due to the high fees and charges that go along with it. It's just a big no no, never withdraw cash from a credit card UNLESS it is a special travel credit card and you are using it overseas (e.g. Halifax Clarity) or you specifically have applied for a 0% money transfer card.




    Yes, make sure you keep them separate. One money transfer card and one purchases card. Yes apply for them at the same time, it makes no difference.

    Thanks for the info drop!

    Is this why the eligibility checker says 95% and "up to"? It can't be sure? I actually have a Lloyds account with a healthy balance in it (for now), so that might work out, if they actually look at that as well as just credit history.

    I see regarding the promotional aspect. Thanks.
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