Go Ahead, Give Yourself Some Credit

When somebody at a party asks what you do for work, you probably respond by saying you’re an artist or an actor. You’ll probably emphasize your creative and expressive sensibilities and try to really communicate the subjective nature of your work. But have you ever considered leading with “business owner” or “entrepreneur?” Although they often evoke troubling images of fleece vests and boat shoes, these terms nevertheless make up a significant component of our professional identities.

And as business owners and entrepreneurs—independent artists building and cultivating our own money-making enterprises—we must always stay aware that we’re in a high-liability field: At any moment, our gigs might dry up and our cash flow could come to a screeching halt.

This is where debt comes in. The proverbial wisdom tells us that debt in all its forms is an evil that must be avoided. And if for some reason we can’t avoid it, it should be eliminated as quickly as possible. We certainly agree that carrying burdensome debt is not a good thing for your business or mental health, but sometimes borrowing capital is a necessary and even helpful tool to jumpstart our business in the very beginning. Headshots, acting or voice lessons, self-producing, throwing community-building events, taking people out to dinner, investing in a publicist—we can’t necessarily wait until we are big and famous to do all of that. Taking on credit—in other words, borrowing money—is a powerful tool because we can’t always wait to make those investments in our own success.

If your eyes are glazing over or you’re beginning to produce a cold sweat, stop and take a breath. There is absolutely no shame about not knowing the first thing about debt and credit. After all, if creatives learned how to run their businesses in their early twenties, then we probably wouldn’t be here as Artist’s Strategy! Let’s spend some time discussing credit, ways to borrow proactively, and how to stay on top of your debts as a responsible business owner and creative entrepreneur.

Get your definitions right. Your credit score is a number used by banks to determine how financially reliable you are. The higher the score, the more trustworthy you appear to a bank, and the more likely they are to lend you money. Your history of paying bills, the size of your current debts, and the number of credit cards you have open are all factors that will affect your credit score, which ranges between 300 (bad) to 850 (excellent). Lenders look to your score for signs of trust and dependability, which matters when you’re planning large purchases such as a home or car.

Know your score. I have worked with countless artists who simply didn’t know what their credit score was or even how to go about finding it. Some, fearing the worst, avoid the subject altogether. But knowing your score is one of the first steps to financial freedom. Credit Karma is a free service that monitors your official credit scores and estimates their aggregate. Experian monitors your score even more accurately by pulling direct data from your credit bureau. This is called an official credit report, but be careful: Your credit score may actually go down slightly the more often you request an official credit report. Stick with Credit Karma for day-to-day awareness and maintenance.

Raise your credit score. So you’ve finally registered for Credit Karma and took the leap to check your score—and it’s, well, not good. It happens! Fortunately, there are a number of ways to increase your credit score. But keep in mind that these tactics take some time and do not promise a silver bullet or an overnight solution to repairing bad credit. You can:

• Open a new line of credit, unburdening your existing line of credit, which is potentially overwhelmed

• Create payment plans as necessary but begin paying down your debt no matter what—and even slightly above the monthly minimum!

• Avoid financial pitfalls that may work against you such as big purchases, maxing out credit cards, or co-signing other people’s loans

• Dispute, if necessary, any financial claims that seem to be untrue on your report

• Start paving a way for a healthy financial future today. Simply learning what your score is and checking it consistently over time is a step in the right direction

Overall, as with so much of the work, embrace the incremental steps you can take to make the most of your current financial situation and suss out a plan for getting out of whatever rut you may be in. Let’s prove the world wrong and show them that artists can be financially responsible, thriving members of society and that we have more to offer than our abilities to entertain and make people feel. All tea, no shade.