Semi Truck Financing and Credit

When it comes to getting a new truck, credit can play a big role. When shopping for a loan for a new truck, you need to keep your credit health in mind. A lot of truckers actually harm their credit by applying willy nilly to any and every company that promises they can get them the truck of their dreams.

What actually happens is a LOT of hard inquiries on your report. Remember, each hard inquiry can ding you about 10 points. If you even apply to 4 places, that’s enough to drop your score a whole credit grade.

Dealers are another avenue you want to be wary of in regards to credit. When you “apply” or see if you can get financed for a truck you like at a dealership, what that dealers often do is send your information around to any bank or company they think you can get approved at. Again, this leads to many unnecessary and damaging hard inquiries.

Don’t worry, there are companies out there that can get approved for Commercial Truck Financing without harming your credit. We here Sharp Financial Services can help you by getting you pre-approved with just a soft inquiry. This way, you can see your rates without any damage done to your credit or commitment.

For these reasons, it is important for you to be familiar with both your credit score and what financing companies can offer you at your current credit rating before you ding your score. Do your research and make sure you are making good choices for your business. Click the link if you want to read our in-depth Semi Truck Financing guide. Being knowledgeable about the process and what it means in terms of credit will help you make the best choices.

Breakdown of FICO Score Ranges

• 300-579: A score in this range is considered Very Poor. Credit applicants with a score in this range will often be required to pay larger fees and deposits, or sometimes may not be approved for credit at all. 16% of people have a score in this range.
• 580-669: Scores between the 580 mark to the higher 600s are called Fair credit scores. Often, people with scores in this range will be referred to as subprime borrowers. A total of 17% of people have a credit score in this range.
• 670-739: This range is referred to as Good. Individuals with scores this high have a much lower rate of default. Statistically, about 8% of applicants with a Good range credit score will become seriously delinquent. Around 21% of people have a score in this range.
• 740-799: People with scores in the mid to top 700s are in the range of Very Good. Borrowers with scores in this range will receive better than average interest rates from banks and lenders. 25% of people have a score in this range.
• 800-850: The top of the scale is considered an Exceptional credit score. Individuals with a credit score above 800 receive the best rates from lenders. Around 21% of people have scores between 800-850.

Statistically speaking, most people’s credit scores fall between the range of 600 to 720.

What Affects Your Credit Score

• Payment history – This shows if you’ve made your payments on time or at all.
• Credit utilization rate – How much of your credit you are using on your credit cards.
• Type, amount, and age of credit accounts – Lenders do want to see diversity on your credit report. Having a good mix of credit cards, a car loan, maybe a mortgage on their helps your score.
• Total Debt Owed – This is the amount you owe in loans and how much is on your cards.
• Bankruptcies, Child Support Due, Public Records – Filing for bankruptcy or having a large amount of delinquent child support will hurt your score.
• New Credit Accounts – Opening a lot of accounts in a short period of time can hurt your score. If you have gotten too many loans or credit cards in a 2-year period, it can ding you.
• Hard Inquiries – The number of times a lender has requested your credit information will affect your score. These searches stay on your report for 2 years.