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How’s your boat loan profile? Understanding credit rating

Looks are important in many respects, possibly very important to boat buyers. The look of the boat that is. While many aspects of boat design and construction are around performance, stability and safety, appearance is also key. Designers put much thought, talent and work into designing boats of all types that have a sensational look, appearance and profile to suit their market. Descriptors often include references to the sleek, streamlined lines, low or high profile in the water and other aesthetics of key features.

But when it comes to applying for a boat loan, there is one profile that trumps the appearance of the boat you are buying. That’s your credit profile.

What is a credit profile?

While the terms to describe a credit profile are somewhat interchangeable, a credit profile is a term used to describe the entirety as such of a person’s credit rating. Individuals and businesses that have ever borrowed money, taking on debt or have accounts with stores and utility providers will have a credit profile or credit report.

A credit score is a specific value attached to an individual and reflects the positive and negative entries on a credit report. The overall credit profile is essentially the credit rating for that individual or business.

A credit rating or profile is the assessment of an individual or business in regards to creditworthiness. It rates the person in terms of how good or not they are at meeting debt obligations.

This rating or profile is accumulated and calculated based on financial information and personal details which are kept on an individual’s credit report. A person does not need to create their own profile, it is done by credit providers when a loan or account is established.

Credit reports are kept by Credit Reporting Agencies of which there are several main ones including Experian, Equifax and Illion. Credit providers will make entries or notifications to credit reporting agencies in respect to credit activities of individuals and businesses and these notifications are placed on the credit report.

Issues such as late payments and defaults are reported and impact negatively on a credit profile. Applications for finance and loans and increases in credit card limits are also reported to credit reporting agencies and included in the report.

Negative entries attract a poor credit score and an overall low credit profile.

Through a set formulation, a credit score is calculated for an individual based on the information in the credit report. This includes monies borrowed, number of credit applications and payment history. From that basis, an actual score is arrived at between 0 and 1,000 or 1,200. The higher the credit score the stronger the credit rating and profile.

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How to check your profile?

The Australian Government’s MoneySmart website advises that it can be worth getting a copy of your credit report each year to check for errors and your rating. Acquiring a copy of your credit report is easy and don’t be fooled into paying! Individuals have a right to a free copy of their credit every 3 months.

It’s quite an easy process by contacting one of the credit reporting agencies. Online access, by mail and by email reports are available. For details of where to apply for a copy of your credit profile check the details at https://moneysmart.gov.au/managing-debt/credit-scores-and-credit-reports

What is the relevance to boat loans?

A credit profile is very important if you are considering applying for a boat loan or any other form of finance. It forms an integral part of a loan application assessment as lenders refer to a credit score and report when making their decision to make a loan offer.

The better the credit profile the better the loan offer can be. A poor credit report can attract a higher interest rate, tougher loan conditions or in a worst-case scenario, having a loan application rejected.

How to fix and improve a credit profile

There are two ways to look at your credit profile: fixing existing errors that appear on your report and taking preventative action and steps to ensure your credit score remains in a strong position or improves.

Some entries in a report may be able to be expunged due to error or timing. Steps on how to do this can be found at the MoneySmart website link noted above.

To ensure you have or retain a good credit score, maintaining a good payment history is paramount. Make all payments by the due date including loan commitments and utilities, telco and other provider bills.

Loan applications are reporting to reporting agencies by lenders. Multiple applications for the same loans can appear, in very frank terms – desperate, and impact negatively on a credit score. This situation can be prevented by using a broker-style lender like Jade Boat Loans. To get a better idea of what your repayments may be should you take out a loan, using our boat finance calculator is a good way to start.

When handling your loan requirements, enquiries and requests for quotes we make to lenders on behalf of our customers do not have the same impact on a credit score as applications made by the individual themselves.

That’s just one of the many advantages and benefits that our services provide to both business and personal customers. Credit and loans are an integral part of today’s life and lifestyle and maintaining a good credit profile can be critical to achieving financial objectives.

To use our services to source your loan contact Jade Boat Loans on 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.

 

 

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