Does Being Self-Employed Affect Your Credit Rating?

Does Being Self-Employed Affect Your Credit Rating? Going self-employed gives you the freedom and the luxury of being your own boss. But there is a serious side, including the impact on your credit rating.

Being self-employed doesn’t actually show up on your credit file. But when you are self-employed you are personally responsible for all the liabilities of your business (even if they are made out to your business).

That means if you default on a payment, or worse, get a County Court Judgment (CCJ) it form part of your personal credit rating.

It doesn’t matter if it was in the line of business, it all comes down to you.

What does “Credit Rating” Mean?

Credit rating is a type of score given to each person that is a mark of their trustworthiness to handle debt.

So if you have a mobile phone and have always paid the bill on time, then you will have demonstrated a good ability to handle credit.

Conversely, if you have a credit card and always pay it late (whether in full or not) there will be a mark made on your credit file showing exactly how many times you were late.

A perfect credit score is 999. Here are the ranges:


Generally, whenever you want to take out credit or finance, your credit record will be checked to assess your suitability.

That includes when you want something like:

  • Credit cards;
  • Mobile phones;
  • Store credit;
  • Car finance;
  • Personal loans;
  • Mortgages.

Are You Self-Employed?

First things first, you should check that you are actually self-employed.

When you are self-employed you work for yourself and are responsible for finding your own work and working out your taxes.

It is unlike when you are employed and your employer handles your taxes and national insurance deductions. Then issuing you with a payslip to show what they have taken out of your pay.

You can be employed and self-employed but the way you get credit can differ between each.

Why Does Your Credit Rating Matter When You are Self-Employed?

When you are self-employed you are personally liable for the debts of your business.

It means you must stay on top of paying all your bills and debts in your business as well as personally.

If you want to take out credit, the agency checking you won’t be interested whether your defaulted on a payment in your business. There is no difference in their eyes.

How to Check Your Credit Rating

Checking your credit rating can be nerve-racking.

But if you are ready to pluck up the courage to do it, then here’s how you can do it for free.

Head Over to Check My File & Set Up An Account

Check My File offers a free 30-day trial. They also are one of the comprehensive checkers around, recommended by professionals because it shows you what lenders are seeing.

Visit Check My File Website

You’ll need to enter a credit card, so remember to make a note to cancel the account once you have your report.

Using the Dashboard

Once logged in you’ll be presented with a dashboard summarising a lot of information, including:

  • How major lenders like Callcredit and Equifax view you;
  • A summary of the current credit agreements you have;
  • History of searches made against your name.

Download Your Credit Report

If you don’t want to keep the account once the trial expires, then download your credit report. I find it the easiest way to look at the information too.

You’ll need to choose “Download Printable Version”

Review Your Credit Report

Your credit report will contain your credit score and details of all the credit agreements you have. It also shows whether you made all your payments on time dating back anything like 6 years.

Ideally, you want to see lots of green boxes – that means you have paid everything on time and are managing your credit well.

Having a low credit score or late payments on your credit report can restrict your chances of taking out credit, loans or mortgages. But having your credit report means you can start to make improvements.

How to Improve a Poor Credit Rating

If you find your report shows that you have a poor credit score, then there are a few things you can do to start making improvements.

  • Check you are on the electoral roll as evidence of where you live;
  • Start repaying your debt on time from this point onwards;
  • Consult an expert before applying for finance like a mortgage who will make sure you approach lenders correctly;
  • Reduce the amount of credit you have on your name for example: if you have a lot of credit cards consider closing them if you aren’t using them. The ability to max out credit cards makes lenders uncomfortable;
  • If you have not used much credit in the past, then consider taking out credit to demonstrate your ability to manage it on your credit report for example, by using a credit card.

How to Get a Self-Employed Mortgage

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant turned entrepreneur who helps the self-employed gain financial confidence when it comes to running the numbers side of their business and filing tax returns with guides, templates and resources on the Go Self-Employed website.