Boost Your Credit & Build a Savings Cushion Before Practice Ownership

Tips to Build Credit & Savings for a Thriving Future of Dental Practice Ownership

By: Dr. Hannah Crowell

Improving your credit and saving money before buying a practice are important steps in your financial journey.

Here are some tips for both.

Tips for Improving Your Credit Before Buying a Practice

Here are essential tips to help improve your credit on your path to dental practice ownership.

1. Check Your Credit Report

Start by obtaining a copy of your credit report from all three major credit bureaus (Equifax, Experian, and TransUnion). You can get one free report from each bureau annually at 

2. Pay Bills on Time

Consistently paying your bills on time is one of the most important factors in improving your credit. Set up reminders or automatic payments to ensure you never miss a due date. 

3. Reduce Credit Card Balances

High credit card balances relative to your credit limit can negatively impact your credit score. Aim to keep your credit utilization ratio below 30%. 

4. Avoid Opening Too Many New Accounts

Opening too many new credit accounts in a short period can lower your credit score. Be selective about new credit applications. 

5. Diversify Your Credit Mix

Having a mix of credit types (credit cards, installment loans, mortgages) can positively affect your credit score. 

6. Negotiate with Creditors

If you have overdue accounts, try negotiating with your creditors to settle the debt or set up a payment plan. 

7. Be Patient

Building good credit takes time. Consistently following good credit practices will gradually improve your credit score. 

Tips for Saving Money Before Buying a Practice

Here are essential tips to help you save more money on your path to dental practice ownership.

1. Determine Your Budget

Calculate your potential practice purchase costs, including the down payment, closing costs, and working capital requirements. Your budget will guide your savings goal.

2. Save for the Down Payment

Typically, you’ll need a down payment for a practice, and the amount varies. It can be 10-20% or more of the practice’s purchase price. Save accordingly. 

3. Reduce Personal Debt

Reducing personal debt, such as credit card balances and loans, will free up more funds for your practice purchase and improve your financial position. 

4. Create a Dedicated Savings Account

Open a dedicated savings account for your practice purchase. This separates the money from your regular expenses and makes it less likely to be spent on other things. 

5. Increase Your Income

Look for opportunities to increase your income, such as taking on part-time work or taking CE to broaden your practice skill set to accelerate your savings. 

6. Invest Wisely

If you have surplus funds that won’t be used in the near future, consider investing them in a diversified portfolio to potentially grow your savings. 

7. Consult a Financial Advisor

Consider seeking guidance from a financial advisor who can help you plan and invest for your practice purchase. 

Remember that the amount of money you need to save before buying a practice will depend on the specific practice, its purchase price, and your financial circumstances. It’s essential to have a well-thought-out financial plan and a good credit score when pursuing such a significant financial commitment. 

In Conclusion

Looking to start up or acquire a practice and want to talk about where you stand?

Provide’s industry experts are always happy to talk through your practice ownership goals and will help guide you through your practice ownership journey.

Photo by Andrea Piacquadio

Dr. Hannah Crowell

Dr. Hannah Crowell

Dr. Hannah Crowell is a graduate of The Ohio State Dental School and is practicing as a general dentist in Houston, Texas. She happily lives there with her husband (also a general dentist), their three young children, and their pup. She is kept busy with her work and family, but enjoys hanging out with family and friends, road trips (with many necessary pit stops due to feisty toddlers), and exploring new cities and the great outdoors whenever she gets the opportunity!