Credit Score and Locked Credit Effects on Loan Applications – Aviation Finance
Credit generally does not have a significant impact on the interest rate associated with an airplane loan, although it can potentially be a blocking problem. In our experience, a person’s credit score affects the ability to obtain a loan the most if it is below 700. Generally speaking, credit score parameters belong to one of the following: the following four groups:
- Less than 680
- 680 to 700
- 700 to 730
- And more than 730
Depending on the category in which your score falls, the credit score will affect the loan in two ways: your interest rate and / or the structure of your loan.
In reality, a score of 730 is as good as a score of 800 and vice versa. It is a truism that is not widely discussed. What really matters is a credit score below 680. Trading below that is difficult.
Your credit score is part of The four Cs of credit:
* Capacity–What is your ability to repay the loan? Do you have a job or other source of income? Have you been at your job for a while? Do you have other debts?
* Character–Are you going to repay the loan? Have you ever used credit? Are you paying your bills on time?
* Guarantee–If you don’t repay the loan, is there anything of value that you accept to lose?
* Capital city (accumulation)–What are you worth? Do you have other assets, such as a savings account, real estate, or equity securities, that you could use to pay off debt? How liquid are these assets?
Freezing or foreclosing on your credit is a reliable way to prevent identity theft. Both have been offered by credit reporting companies for years and millions of people are taking advantage of this strategy. Remember that doing either adds time to the application process. Lenders won’t be able to withdraw your credit until you unlock or unblock your credit. Our advice is to release your credit well in advance of applying, as it may take longer than expected for all three credit bureaus to comply. And remember–if you have blocked your credit, you must go to the three credit bureaus to unblock it.
While everyone is entitled to a free credit report every year (beware of scammers), the credit report does not include a credit score. Your bank, your credit card provider, even identity protection companies like Lifelock can provide you with a free credit score.
Very good advice. Excellent rates. Helpful and responsive representatives you can trust. Three good reasons to turn to AOPA Aviation Finance when buying or refinancing an aircraft. If you need a reliable source of funding with people who are by your side, just call 800.62.PLANE (800.627.5263) or click here to request a quote.