The Importance of Credit Scores in Commercial Truck Financing

Your credit score is one of the most significant factors when it comes to your finances and applying for credit. 

If you are trying to secure commercial truck financing, your credit score will play an important role in the type and size of the loan you can get, as well as your interest rate. It also determines whether or not you can get financed at all. 

What is a Good Credit Score? 

Referred to as the FICO score, your credit score will fall in a range that will let you (and your lender) know just how healthy your financial status is or if it needs work. Knowing your score will also help you get an idea as to whether or not you will qualify for commercial truck financing before you submit your application. 

Below is the breakdown of credit score ranges:

300 – 579: Very Poor 
580 – 669: Fair 
670 – 739: Good 
740 – 799: Very Good 
800 – 850: Exceptional

Ideally, you want at least a ‘good’ FICO score to finance your commercial truck. Do you know what your score is? 

How Credit Scores Are Calculated

Credit scores give lenders a quick idea of your financial health — without having to take a deep dive into your credit history. And, while they are usually comparable, each credit bureau will have a score based on its calculations — without releasing the details of how they calculate it. 

It is safe to say, however, that a few things considered when determining your score include: 

• How many lines of credit you have open 
• How long you have had those accounts
• The types of credit you have
• What is your credit limit on the accounts 
• How much of that credit limit is still available to use
• How often you have applied for credit in recent years
• Your payment history, including on-time and late payments

If banks and other various financial institutions hand over the money to make your big investment, they want to ensure that you will be able to pay it back – willingly. Your credit score reflects your credit history, including how you have previously handled loans. To them, it is a good indicator of how you will handle their loan, too. 

Because your credit score is determined using the above factors, they can quickly decide if you are a safe borrower with little risk — or if you are not a dependable borrower. This significantly influences your loan application. 

How to Improve Your Credit Score

There are a few different ways to improve your credit score within your current financial situation, including: 

• Making your payments on time
• Limit your applications for credit as inquiries can hurt your score
• Keep accounts open to extend the length of your credit history
• Pay down revolving account balances
• Dispute any discrepancies or inaccurate information

Depending on your current credit score, improving it may help you more easily finance a commercial truck. 

Need Financing With Poor Credit? 

If credit scores play such a large role in commercial truck financing, how does one with bad credit get started in the industry? At 10-4 Financing, we understand that sometimes life decisions and circumstances can lead to less-than-ideal credit scores. Having a commercial truck can be the first step in turning that around. 

Getting commercial truck financing with bad credit doesn’t have to be hard. We can help. 

Contact us today — or apply online.