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Expanding in a Down Economy – Where’s the Money

October 14, 2008 |

Expanding your practice, or opening a new practice or medical spa is going to be capital intensive. Before you embark on this journey, you need to ensure you have your personal finances in order. Part of the IAPAM’s Aesthetic Practice Workshop includes strategies for opening a medical spa in today’s economy.

You are going to need to have access to emergency money and other methods of financing (i.e. working capital, equipment leasing).  It’s important to ensure these are available to you prior to starting, rather than finding out half way through you can’t get the financing you need.

Credit Bureau Ratings

Every type of financing starts with your credit bureau score. There are three bureaus that maintain a score for everyone, and it’s important that you check all three of them. “I’ve seen differences of 100 points between two credit bureaus, and that can mean the difference between an approval and a decline,”says Jeff Russell.

Top 3 Credit Bureaus:

1.    Equifax
2.    Experian
3.    TransUnion

Thanks to a 2004 federal law everyone is entitled to one free credit report from each of the main credit reporting agencies once per year. Accessing these reports does not affect your credit rating.
What score are you looking for?  Over 650. If any of the scores are less than 650, you need to contact the bureau and find out why. It could be because of a previous bankruptcy, foreclosure, too many late payments, etc.. But it could also be an error. Having lower than a 650 credit score will cost you a significant amount of money, since your interest rate could be double that of someone with 650 or higher!

Top 3 Tips for Improving your Credit Score

  1. Review all three credit bureau reports (contact information below). You should do this every year to make sure there are not any errors.  If you find an error, contact the bureau immediately, because it can take some time to get it removed (could be several months!). Please note, if you contact the bureaus directly, your inquiry will not affect our credit score.
  2. Pay your bills on time!  Make sure you make at least the minimum payment on time each month. Being consistently late is a red flag for creditors.
  3.  Don’t cancel credit cards you don’t use, because this will reduce your available credit and thus lower your credit score. On the flip side, don’t go getting new credit cards to get more credit, that will also lower your score.

Credit Bureau Contact Information

P.O. Box 740241
Atlanta, GA 30374

P.O. Box 2002
Allen, TX 75013
1 888 397 3742

Trans Union
P.O. Box 1000
Chester, PA 19022

Jeff Russell
View Jeff Russell's profile on LinkedIn

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