Can working from home affect your credit worthiness?
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.