If planning to purchase a boat with finance this year, it can be advantageous to the loan prospects, especially the interest rate, to do a credit score check. Many individuals make it a habit to check their credit score on an annual basis to ensure there are no errors and/or incorrect entries. Knowing what is included in a credit score and understanding how the information is used by lenders, can be extremely beneficial to those applying for new loans and credits.
In short, a better credit score improves the prospects of being offered a lower interest rate and that means a cheaper boat loan. While Jade Boat Loans always focuses on achieving cheaper rates for our customers, a review of the credit score forms an important part of the application assessment process by our lenders.
The terms ‘credit score’, ‘credit rating’ and ‘credit profile’ are often used interchangeably but technically, they are different.
- Credit profile is the record of the credit score, rating and other details.
- Credit score is a specific number, from 0 to 1,000/1,200 depending on the reporting agency. It is calculated according to a method and based on specific information submitted by credit providers and others.
- Credit rating is the band that the credit score sits in. These range from low to excellent.
You may never have seen your credit report or checked your score. But if you have ever made an application for a loan or another form of credit, you will have a credit report. It is not something that an individual needs to set up themselves. It is created by the credit providers and information is stored by Credit Reporting Agencies.
Impacts on Credit Scores
Knowing what information affects the credit score may assist in ensuring the score and the credit rating are kept in a good band and a better boat loan is secured.
A credit report contains information regarding:-
- Personal details
- Credit rating – specifically the band that a credit score sits in. The specific credit score may also be included.
- Loans and credit products held over the previous 2 years. The details will include the actual product, the provider or lender, limit and other specifics.
- History of repayments
- Defaults on bills, loans and credit cards – this can include phone and utilities.
- Credit and loan application information
- Bankruptcy and agreements for debts
- Requests for credit reports made by providers
The credit score, rating and overall credit report will be reviewed by lenders to assess creditworthiness when a boat loan application is submitted.
Checking a Credit Score
With the credit score so important to loan applications, what can be done to improve and/or keep a good score? The first step can be the check the current credit profile.
Individuals are entitled to a free copy of their credit report every three months. They can be obtained through Credit Reporting Agencies and by other means. Information on how to obtain a copy can be found on the Moneysmart website.
If errors or inaccuracies are detected, there is a process that can be followed to attempt to fix these issues. This is usually referred to as credit score repair.
Improving a credit score can involve staying on top of due dates for bills and other credit payments. Keeping the balance sheet in a good position may also contribute to creditworthiness as can minimising the number of loan and credit applications made.
Significance of Credit Score to Boat Loan
There are two issues that we highlight regarding boat loans and credit scores.
You may have noticed that loan applications are included in the credit report. These can be applications only, not necessarily applications that were followed through to the loan stage. Multiple loan applications may give a negative impression to lenders.
That means the good intentions of loan seekers in applying to many banks and lenders can backfire in the implications for the credit report. By using our services, this issue may be avoided. We cover offers from many lenders to source the cheapest boat loan interest rates without our enquiries appearing as loan applications on our customers’ credit profiles.
The second issue is the score and the credit history. Lenders will consider these aspects when preparing an offer for a boat loan. Using tools like a boat loan finance calculator can help potential borrowers understand their potential monthly payments and interest. The higher the credit score with a good to excellent credit rating band will attract a better interest rate than a low to poor rating. The credit score reflects the creditworthiness of the loan applicant and that can determine the interest rate and possibly certain conditions around the loan.
While our consultants are excellent negotiators when it comes to sourcing the cheapest rates, the credit score remains an important factor. With all the great purchasing opportunities offered by the major boat shows coming up, now could be a great time to start preparing for that boat loan with a credit score check.
For cheaper interest-rate boat loans, contact Jade Boat Loans at 1300 000 003
DISCLAIMER: THE INFORMATION AND SPECIFIC DETAILS CONTAINED IN THE CONTENT OF THIS ARTICLE HAVE BEEN PREPARED AND ARE PRESENTED PURELY AS GENERAL INFORMATION AND NOT INTENDED AS THE ONLY SOURCE OF FINANCIAL ADVICE FOR BOAT BUYERS AND LOAN BORROWERS. FOR THOSE THAT CONSIDER THEY REQUIRE SPECIFIC ADVICE, THEY SHOULD CONSULT WITH A FINANCIAL ADVISOR. LIABILITY IS NOT ACCEPTED IN REGARD TO ERRORS AND MISPRESENTED DATA AND DETAILS HEREIN.