Entrepreneurs

5 documents to prove income, even if you are freelance or work on your own

This article was translated from our Spanish edition.

Opinions expressed by Entrepreneur contributors are their own.

This article was updated on September 19, 2021

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Proof of income is a document that confirms the salary or income received by an employee or service provider, whether from a company or a public organization. In Mexico, normally salaried people or not, need one of these vouchers to obtain a credit card or bank loans , automobile credit plans , real estate rental, and in some cases, as a requirement to process scholarships or other benefits such as insurance.

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It is about demonstrating to the credit institution that you have the financial solvency to face the payments month after month, says Bernardo Prum, director of Coru.com . When you are an employee, your receipt of payment for your salary works as proof, but what happens when you have your own company, are freelance or work on your own? “Most likely, you will not generate these types of documents, so it will be difficult to officially prove the income you receive, regardless of the amount,” he adds.

5 ways you can formally prove income

In order to guide people who do not have a conventional proof of income, the financial services comparator Coru.com, explains the following alternatives that can also work to cover this requirement before most banks and finance companies in Mexico.

1. Payroll receipt

It is the receipt of payment that the company in which it works, whether public or private, delivers detailing the salary, benefits, withholding of taxes and other concepts that are handled.

2. Bank account statements

Another good way to verify stable income is with the statements of the bank account where our money is managed. The ideal is to make frequent deposits to that account, thus, in addition to showing that there is a constant income, the amount to be verified may even be higher than what a payroll receipt can indicate.

3. If you receive cash payments or your work activity is not registered in the SAT

In this case, it is best to open a basic savings account and deposit all your income, so the statement of that account will serve as proof. If you choose this option, keep in mind that the same amount of money must be deposited for at least three months in order to verify that you have a fixed income.

4. Annual tax declaration

For entrepreneurs or owners of their own businesses, merchants or independent workers who carry out a work activity registered with the SAT, income can be verified with the annual tax return. Remember that the declaration must be made digitally.

5. Credit card statements

If you have a bank or departmental credit card, the statement that arrives month after month serves as proof to show that you have the ability to pay and have constant cash flow. It is important to keep your payments up to date to maintain a good credit history.

For some types of business credit, the company’s inventory report may be sufficient support for a financial institution to consider approval of the loan product. Another financing alternative is low-requirement online loans. In these cases, it is best to check first that it is a company endorsed by the Financial Entities Bureau. Remember that you should never give money to apply for a loan, as these types of requirements are a sign of fraud.

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