For those of us wanting to buy, build, or grow our optometry practice, we need to have the financial resources to invest. For me, I continually push ahead with the Dave Ramsey method of finance, debt free personal living. The area I struggle with in his philosophy is what do we do with the business debt that seems like a must for growing a practice. Managing debt and credit is a skill that is developed and learned throughout our lives. The sooner we learn how to manage this to our advantage the sooner we succeed financially. This weekend I will be lecturing at GWCO to a group of 250-300 students about credit and debt management. In preparing for this I was compelled to check up on my own credit report and credit score. You can access your credit report from three different companies for free at www.annualcreditreport.com Once you do this you can sign up with TransUnion and receive their services for 7 days free, then cancel. This allows you to access your credit score.
If you are considering buying a practice or buying into a practice then this is very important to you because your credit score determines your interest rate.
More on your credit report
Your credit report will list out all open or closed accounts over the past seven years. There is a history that is color coded according to on time payments and late payments. The report also breaks down which of your lines of credit are adversely effecting yourcredit and which are satisfactory. Your credit score is then based on the credit report and weighed according to this criteria… www.myfico.com/crediteducation/whatsinyourscore.aspx| Credit factor | % of total score | Considerations for improving your score |
| Payment history | 35% | Have you made your payments on time? |
| Outstanding debt | 30% | How much do you owe? |
| Credit history | 15% | What is length of your credit history? |
| Pursuit of new credit | 10% | Have you made numerous applications for new credit?
Are you taking on more debt? |
| Types of credit in use | 10% | Do you use a variety of credit types? |
Source:
www.myfico.com/crediteducation/whatsinyourscore.aspx
Source:
www.myfico.com/crediteducation/whatsinyourscore.aspx
