Leasing: Take off the rose-colored glasses

Q. Why is your personal credit score so important to your business success?

A. Business owners regularly review numbers, but there's one number that they often overlook--their personal credit scores. Yet, because many of the businesses in our industry are closely held companies, part of a lender's review is an assessment of the owners and their personal credit scores. A credit report from any of the three major reporting agencies (Transunion, Experian, Equifax) can be part of a lender's decision.

One of the keys to a healthy credit report is to pay your bills on time. Maxing out all of your available revolving credit will have a negative impact on your credit report. Also, keep a good percentage of available credit. Be aware of the items on your credit report.

Knowing what's a good credit score is also an important part of keeping it healthy. A good credit score is in the 700 range. There is no magic number that guarantees access to capital, but you can't ignore that a credit score is one tool that many lenders review to make decisions about your business' future.

So as an owner, it's time to take off the rose-colored glasses and see what the lenders see. It's time to have an honest conversation about the strengths or weaknesses that you and your partners bring to the table. One strong credit score doesn't necessarily mitigate a weak credit score, so don't let your access to capital be limited because of a poor personal credit performance. hme

LeAnn Kelly is a sales manager, Home Care Division, for VGM Financial Services. Reach her at 800-532-6507 or lkelly@vgmfs.com.