CxO Corner: Controlling Your Financial Health

A Bad Credit Score Can Be Lethal For A Small Business Owner

Ralph Waldo Emerson coined the phrase “The first wealth is health” over a hundred years ago when medicine was in its infancy.  Today, those serious about their personal well being understand that factors like blood pressure, while hidden, need to be controlled.   Why then, would anyone concerned about their financial well being not stay on top of their credit score?

The importance of maintaining good credit is critical.  Besides applying for additional credit cards, your score is also used for mortgages, car loans, student loans and utilities such as cable and cell phones.  In fact, it directly correlates to the interest rate that you will pay.  Over the life of a home mortgage, this could be substantial.

There are 3 credit bureaus that monitor individual credit at the national level – TransUnion, Equifax and Experian.  When computing a score, many factors are taken into consideration, such as previous credit performance, current debt and types of credit.   In general, a score of 700-750 is considered good, 750-800 is very good and 800-850 is considered excellent.

Nearly Half Of Americans Do Not Know Their Credit Score.

The above statement is disturbing since the 3 credit bureaus have combined to offer a free service through that allows individuals to review their entire credit history.  The site is www.annualcreditreport.com and the entire process to register and enter your information takes about 20 minutes to complete.  At the conclusion, you will be provided with your current score.

Take Control of Your Credit

If you’ve never visited this website or reviewed your credit, you may be in for a surprise.  You may find that those credit cards you no longer use are still considered active.  Worse yet, there may be incorrect information from credit or collection companies, which will drag your score lower.   For many, cleaning up a blemish or two is not much more than a nuisance.  But for a startup company, a bad score could be lethal.  So here is your takeaway.  Mistakes are made and you are ultimately responsible for your own housekeeping.

So whether you’re an entrepreneur or seasoned professional, take the time to review your credit information.  And if you’re already diligent about maximizing your score, please pass this information along.  Let’s help get the other half of America educated.  Wealth, like health is within our control.

 

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