When you’ve given enough thought and consideration into entering the world of franchising, the world of finance won’t be very far behind. Most new franchisees rely on some form of financing to close the deal on their pending entrepreneurial dreams. So unless you’re a retiree sitting on a nest egg designed for this move, let’s look at how you can conduct your own financial check-up in reviewing your credit rating and score.
So what is a credit score defined? It’s a number that represents your creditworthiness. Scores can also be referred to as credit ratings, and sometimes as FICO® scores, published by the Fair Isaac Corporation, and typically range from 300 to 850. A score of 300 is bad—really bad. And 800 is about as high as you can get. The U.S. consumer average is 637, which isn’t great, but workable.
If you don’t have even a passing familiarity with your own credit score, it’s time you did. How many of you could make an educated guess on your own score right now? Would it be below 700? Above 700?
Your credit score should be taken seriously because it defines your ability to borrow money for the really important things in life such as buying a franchise. A good credit score means you’ll borrow money at a lower interest rate, saving you tons of money over the lifespan of a loan. A good credit score also means you can secure and open a line of credit. Simply put, a good credit score means you’re a safe risk to take when borrowing money for the things that matter in life.
Here’s an added bonus—your credit report can also identify irregularities in your financial history which can often be rectified to your benefit going forward. For instance, you may have an outstanding bill which you reconciled but has yet to be removed. With proper documentation, you can wipe the slate clean. Credit reports are also good for turning up any instances of fraud and identity theft.
Here’s how to find out where you stand. Consumers in the U.S. are entitled to one free credit report per year, but it must be requested from any of the big three credit reporting agencies. These include TransUnion, Experian, and Equifax. But you can get started as simply as going to the website: www.annualcreditreport.com or by calling their toll-free number at 1-877-322-8228.
Once you’ve cleared the hurdle of checking your own financial health, it’s now time to focus on the next phase of your investigative process. Choosing the right franchise concept for your budget. And now that your credit score has been verified, you can move on with the ease of knowing that your financing steps shouldn’t be a problem.
Let’s chat! There’s a local FranNet consultant right in your market who knows that market inside and out – knows the personality of the market – knows the competitive landscape. FranNet has a great track record of assisting individuals on their path to entrepreneurship, and one of our franchise experts would love to provide you with guidance free of charge. Sound like something you might be interested in? Get started here and find your local consultant right now!