Getting credit on a low or unreliable income


Having a low income, working part-time or having an irregular income, such as if you're self-employed can all make it more difficult to access the kind of credit you may need.


What if you're on a low or unreliable income and want to apply for credit? 

If you are on a minimum wage job, you may find it more difficult to access credit. While all lenders use different criteria, this means that if your salary is less than this, some lenders may consider you a low-income applicant, and therefore more risky to lend to in their eyes.


Other factors, like your credit rating, will also come into play, but your income (and proof of income) is one of the main things lenders will consider when deciding whether you can afford to repay them. Even if you earn a good living as a freelancer, for example, you may find yourself turned down for credit if you don't have a steady flow of income.


This is why it's a good idea to carry out an 'soft' eligibility check before you apply for credit – in particular, find out if there's a minimum income requirement for the credit card or loan you're applying for. If you don't meet the requirement, don't apply – unsuccessful applications show up on your credit record, and too many in a short space of time will damage your credit rating.


If you've been rejected for a credit application, the first step is to find out why – it might not always be due to a low or irregular income. You can contact the credit agency your lender uses (this will usually be Equifax, TransUnion formerly Callcredit or Experian) and get a copy of your credit report. You can do this for a small fee through the agency's website.


Your credit report will show you what lenders see when deciding whether to accept your credit application. Make sure your credit report is accurate and up-to-date, and if you have any negative factors on there (such as late or unpaid bills), it's usually recommended not to make any more applications until you have gone at least six months without missing a payment.


Meanwhile, you can help improve your credit rating – even on a low income – by using  a credit card like the Vanquis "Credit Building Credit Card". This can pave the way for more affordable forms of credit in the future: as long as you use it sensibly and make payments on time each month, you will establish a pattern of responsible borrowing and repaying that lenders like to see. With a good credit history behind you, lenders will be prepared to offer you better deals, even if there's been no change in your income.