Understanding Your Credit Score
Have you been considering a loan to purchase the boat or RV of your dreams? One of the first things you want to think about is your credit score and how it affects your loan. As your financing specialist, Newcoast has answered some of the most common questions below:
What is a credit score?
A credit score is the numerical value of your credit history, the score evaluates a consumer’s borrowing history, and the probability that they will repay their debts. There are five main factors evaluated when calculating your credit score:
1. Payment history
2. Total amount owed
3. Length of credit history
4. Types of credit
5. New credit
Your credit score affects your ability to borrow money as well as the cost of borrowing it.
What is a good credit score?
While every creditor defines its own ranges for credit scores, (for instance, many lenders think anything over 720 is excellent), here is the average score range:
Excellent: 750 and above
Good: 700 to 749
Fair: 650 to 699
Poor: 550 to 649
Bad: 550 and below
What affects my credit score?
There are five main factors that are evaluated when calculating a credit score. (1) payment history (accounting for 35%), (2) total amount that you owe (accounting for 30%), (3) your length of credit history (accounting for 15%), (4) types of credit (accounting for 10%), and (5) any new credit that you have (accounting for 10%).
Each lender has specific criteria that they will request from the credit reporting agencies, based on the type of financing requested.
How can I check my credit score?
Newcoast recommends that you obtain a copy of your credit report and credit score at least once per year from www.annualcreditreport.com. You can also purchase your credit report and score directly from one of the three major credit bureaus, Equifax, Experian, or Transunion.
It's always a good idea to regularly review your credit score, especially as you prepare to take out a loan for your dream boat or RV. Our professional team of loan experts are ready to answer any questions you may have. Contact us today.
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