Apply for a line of credit before you leap into consulting or self-employment on a full-time basis. Banks tend to be a little more generous with credit terms when you’ve got a full-time job. Of course, rational people will point out that anyone can be laid off from a job, but that consultants at least have several clients, which should make consultants a better credit risk. Lose your job and you lose all income. Lose a client and, well, you’ve still got several clients and your marketing should still be bringing more in through the door.
Still, apply for a line of credit before you ever need one. Although you’ll want to avoid frivilous debt, it’s comforting to know that you can cover a dry spell if you exhaust your emergency fund. And a line of credit usually provides a better interest rate than a personal or small business credit card does.
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[...] Apply for a line of credit before you need it. It can take some time to apply and get a line of credit; if you’re considering doing so, apply for a line of credit now, especially if you’re considering starting a new business. [...]