Issue link: https://www.massageandbodyworkdigital.com/i/70551
SMART CREDIT 1. Be Aware of Your Credit Report If your credit score is good, it will be easy for you to get credit when you need it. If your score is bad, you may find it impossible to get credit from anyone. If you are operating your practice as a sole proprietor or partnership, it isn't possible to separate your personal credit from your business credit; your score for both will be the same. To learn more about how your credit score is calculated, see the Federal Trade Commission's information site at www.ftc.gov/bcp/ menus/consumer/credit/reports.shtm. The three credit reporting agencies (CRAs)—Equifax, Experian, and TransUnion—are required by law to provide you with a free copy of your credit report once every 12 months at your request. You can order your free report online at www.annualcreditreport. com or by calling 877-322-8228. If your practice is incorporated, you may want to register with Dun & Bradstreet (http://smallbusiness.dnb. com/establish-my-business/12305207-1. html) using your legal business name. Registration will provide you with a DUNS number. The DUNS number is a unique nine-digit sequence recognized as a universal standard for identifying and keeping track of the more than 120 million businesses in the Dun & Bradstreet database. There is a fee for this service, but a DUNS number will help to establish your credibility with suppliers and vendors. 2. How to Improve Your Credit Score If you've had some credit challenges, here are some ways to improve your score. Pay your bills on time. This is the smart way to handle credit. Late or missed payments are sure ways to lower your score and incur hefty late fees and finance charges. Avoid large balances. Outstanding balances larger than about 25 percent of your credit limit are red flags to financial institutions. Avoid closing an account and transferring the balance to another credit card. This can hurt more than it can help. Each time you close an account, you lower your overall credit limit, and your existing debt becomes a larger percentage of your limit. 3. Avoid the Minimum 4. Don't Cancel Unused Accounts All At Once If you have a number of credit card accounts but use only a few of them, it's best to close out the unused ones. However, be sure to keep the cards you've had the longest and cancel the newest cards. The CRAs like to see a long record of prompt payments. Too many new cards will tend to lower your credit score. If you have more than one or two unused cards, spread out the cancellations over a period of several months. A rash of card cancellations in quick succession is another red flag for the monitoring agencies. 5. Think Twice Before Opening Payment Trap Whenever possible, don't charge more than you can pay off in full when your monthly bill arrives. When you pay the full balance on your credit card bill each month, you're taking advantage of an interest-free loan from the card issuer. That's the smartest way to use a credit card. If you make only minimum payments on a significant balance, it can take years, and sometimes decades, to pay off the full debt. Once you fall into the minimum payment trap, it can be difficult, if not impossible, to dig your way out. New Accounts If you and your practice don't already have a long and favorable credit history, opening a new credit line will tend to lower your score. New accounts lower the average age of your accounts. That, in turn, affects your credit score. 6. Consolidating Balances Is Not a Cure You've seen the advertisements: "Consolidate all your credit card debts into one low-payment loan and we'll negotiate with your creditors to reduce your debt." Don't believe it. 96 massage & bodywork july/august 2012