topic Re: Which scoring model for boat/luxury item. in Understanding FICO® Scoring

Which scoreing model for boat/luxury item.

Anonymous — Fri, 23 Feb 2018 13:51:15 GMT

Hello everyone, I've done some searching and when anyone asks about boat loans, or anything to do with them invariably the reponses are "don't do it." or "I can't imagine using lending for a boat" I live on a lake. I grew up on a lake. My family grew and my boat is too small!

Just wondering what scoreing model lenders use for boat loans. I just got my report from here, and of course there are 8 different scores.

All over 720. FICO 8 standard 722. With a high of 738 FICO 9 for new auto.

Just wondering if anyone can help me determine which one I should be looking at.

Boat loans are precarious things I belive 720+ is the cut off. But some lenders it could be 730+ for the best teir.

Becuase of that, how accurate are the simulators for the CC debt. According to the simulator if I pay 400 bucks off, I will jump 15 points on my FICO 8. That's worth it and only 2.5 weeks away from when that CC posts.

Might as well ask this too, is the score I see on this myFICO report exactly what a lender would see as well? Meaning there will be no discrepencies to the score? They may ceratinly look at the data differntly, but the score will be the score?

Thank you very much!

Ryan

Re: Which scoreing model for boat/luxury item.

Anonymous — Fri, 23 Feb 2018 18:19:37 GMT

My comments in blue below.

@Anonymouswrote:
Hello everyone, I've done some searching and when anyone asks about boat loans, or anything to do with them invariably the reponses are "don't do it." or "I can't imagine using lending for a boat" I live on a lake. I grew up on a lake. My family grew and my boat is too small!

Just wondering what scoreing model lenders use for boat loans. I just got my report from here, and of course there are 8 different scores.
All over 720. FICO 8 standard 722. With a high of 738 FICO 9 for new auto.
Just wondering if anyone can help me determine which one I should be looking at.

My guess is that most lenders would use FICO 8 Classic. FICO 8 is far more common than FICO 9 or earlier models. And this loan is not for a home, auto, or bankcard, so that would rule out those models (though I suppose I can imagine a lender using FICO 8 Auto).

Boat loans are precarious things I belive 720+ is the cut off. But some lenders it could be 730+ for the best teir.
Becuase of that, how accurate are the simulators for the CC debt. According to the simulator if I pay 400 bucks off, I will jump 15 points on my FICO 8. That's worth it and only 2.5 weeks away from when that CC posts.

Simulators tend to be very inaccurate. If you can list for us all your credit cards with their balances and limits, we can make a better guess than they will. Something like this:

Card 1. Balance = ____   Credit Limit = ____
Card 2. Balance = ____   Credit Limit = ____
Card 3. Balance = ____   Credit Limit = ____
etc.

If you have other revolving accounts, include those too.

Might as well ask this too, is the score I see on this myFICO report exactly what a lender would see as well? Meaning there will be no discrepencies to the score? They may ceratinly look at the data differntly, but the score will be the score?

The two scores will match exactly if they are pulled at the same time. If they are pulled a week apart and something changes on the report, the scores will be different.

Thank you very much!
Ryan

Re: Which scoreing model for boat/luxury item.

Anonymous — Fri, 23 Feb 2018 19:03:11 GMT

Awesome! Thank you for your response!

I know some of these are high.

Chase and Cap one

CC1 Balance-2836 Limit-3500 81%

CC2 Balance-1265 Limit-1800 70%

CC3 Balance-3278 Limit-10750 30%

Best buy

CC4 Balance-761 Limit-2000 38%

Comenity Jared-

CC5 Balance-0 Limit 8600 0%

31% total utilization.

Re: Which scoreing model for boat/luxury item.

Anonymous — Fri, 23 Feb 2018 23:38:05 GMT

I had a boat loan about 5 years ago. They pulled Fico 8 Transunion at my credit union. It was just like getting a car loan for me and no problem. I think having several closed car loans with my credit union helped out a lot. My scores were bad at the time. 630ish. Having a good relationship with a credit union makes a big difference!!

Now, my loan above was on a new boat. My brother in law recently tried to get a boat loan at the same credit union on a used boat and couldn’t get a used boat loan. Banks told him no too on the used boat loan. He ended up having to get a personal loan because the boat was used resulting in a not very good interest rate. Long story short, new vs used makes a big difference in my experience.

Re: Which scoreing model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 00:15:19 GMT

If it is financially workable, the answer is simple: pay all cards to $0 except one, with the remaining card reporting a small balance. You would get a big score boost from that.

If it is not financially workable, then you should spend some serious effort in figuring out how you got in a situation where you'd be willing to pay 20% in interest to credit card companies and then compound that with buying a new boat. I promise I am not being critical, but just trying to honestly give you the advice that is in your best interest as I see it.

A compromise solution is to pay all cards down to under 68% each and your total utilization to under 28%. That would certainly get you some scoring help, though arguably it is no help at all to expand your ability to incur further debt when you are already paying rapacious interest rates and have little or no savings.

Re: Which scoring model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 13:00:26 GMT

@Anonymouswrote:

If it is not financially workable, then you should spend some serious effort in figuring out how you got in a situation where you'd be willing to pay 20% in interest to credit card companies and then compound that with buying a new boat. I promise I am not being critical, but just trying to honestly give you the advice that is in your best interest as I see it.

My credit situation is not something that needs to be "figured out how I screwed up royally."

Not that it matters, 3 of those 4 cards are 0% till the end of the year. And they are on the path to be paid.

I promise I'm not trying to be rude, honest, but that is why I started this thread by saying every search I see about boats ends up with a response like "don't do it." "never borrow money for a boat."

What I was trying to convey is that I wasn't coming to these forums to be talked out of my plan. I was simply looking for advice on the scoring models lenders use, and maybe learn a little about this crap scoring system we all have to wade through.

Please don't take offense to my post, as I truly did not take offense to yours. Just not what I came here for.

Re: Which scoring model for boat/luxury item.

HeavenOhio — Sat, 24 Feb 2018 14:23:13 GMT

I think the point was that bringing your credit card debt down to AZEO is a certain way to improve your scores to the point where they're likely to be safely above from the borderline status that you're concerned about.

Short of doing AZEO, you could try bringing the balances on all cards below 68.9%. That would also bring your total utilization below 28.9%. But that scenario is much less guaranteed as we wouldn't know for certain if those thresholds would apply to your profile or which scores they may improve.

Re: Which scoring model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 14:29:59 GMT

I have owned boats for many years and I constantly am upgrading to a bigger/more luxurious boat every 3-4 years. Loans on used boats are definitely more difficult than loans on new boats, although I've never had a boat loan until last year -- and I only did that to test FICO scoring on loans and because the boat dealer made the loan 0% interest for the first year.

The best place to start is a credit union you have a relationship with. Hands down you will get the best rate. If they say no, then the boat dealer is your next stop although the dealers get a nice commission on some of these loans so you won't get as good of a rate as a CU.

I will never tell a person not to buy a boat, but I will remind them that a boat can cost up to 20% in maintenance, dockage and insurance per year if you aren't good at maintenance and general upkeep. My next boat is out of my price range still but I am hoping to secure one before year's end and the general suggestions from owners I've spoken with is that $70,000 in a year isn't unheard of (that's not including any loan payment!).

If the boat you're looking for is "only" $40,000, the loan is going to be easier than if it's $400,000. You didn't mention the price range. The more boat you buy the more it's going to be like a mortgage versus an auto/RV loan. The expensive boats require a lot more paperwork and income verification -- like a mortgage. The less expensive boats are going to be closer to an auto/RV.

Regardless of what you end up doing, make sure you put a hefty down payment in AND have a hefty emergency fund. I see a lot of abused boats at auction all the time, and it's tragic to think of what is happening to the ex-owners because they didn't realize that owning a boat is an amazing thing, but it's more expensive to upkeep than kids.

I will never NOT own a boat. I love the freedom and the options it provides me. I'm a man of the sea and I will hopefully spend my last breaths at sea somewhere many years down the line.

Re: Which scoring model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 14:58:46 GMT

Hi Ryan. Thanks for the frank but respectful exchange. That can only be a good thing here on the forum.

In terms of pure score improvement strategies, you will get some help (as I mentioned in my first post and as Heaven later confirmed) by getting all cards to under 68.9% (and your total utilization to under 28.9%). The good thing about CC strategies is that there is no need to speculate: just execute the paydown and see what happens. You can always pay the cards down more if you need a further boost: the next step would be all cards at under 48%. You are doing the right thing, however, in coming to us first to ask the best paydown strategy.

Re: Which scoring model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 15:16:17 GMT

@Anonymouswrote:
I have owned boats for many years and I constantly am upgrading to a bigger/more luxurious boat every 3-4 years. Loans on used boats are definitely more difficult than loans on new boats, although I've never had a boat loan until last year -- and I only did that to test FICO scoring on loans and because the boat dealer made the loan 0% interest for the first year.....

Some interesting info here. You're right I never commented on the type of boat. I'm an inland water guy. I'm getting a wakeboard boat. Malibu or Nautique. 50k is max I'm willing to spend the payment is just taking over for my jeep I just paid off. Meaning, My jeep payment was about the same as my boat payment will be. My dock fees are nil as I live on the water. I've owned a Supra for many years and have reubilt the transmission replaced the motor, added wakeboard tower, audio, redone the floor etc. So any and all work will be done by me. So those extra fees you don't think of, I can pretty much negate by my abilities.

Re: Which scoring model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 15:19:26 GMT

@Anonymouswrote:
Hi Ryan. Thanks for the frank but respectful exchange. That can only be a good thing here on the forum.

In terms of pure score improvement strategies, you will get some help (as I mentioned in my first post and as Heaven later confirmed) by getting all cards to under 68.9% (and your total utilization to under 28.9%). The good thing about CC strategies is that there is no need to speculate: just execute the paydown and see what happens. You can always pay the cards down more if you need a further boost: the next step would be all cards at under 48%. You are doing the right thing, however, in coming to us first to ask the best paydown strategy.

No worries.

I really wasn't TOO concerned wih improvement strategies. I only asked about the "calculators" they supply on myFICO dashboard.

My main concern was the model lenders use. Which seems to just be the regular FICO8 standard base score. Which is fair.

Re: Which scoring model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 15:25:44 GMT

A $50,000 boat for wakeboarding is fantastic -- we had one on a private lake in the Chicago burbs for many years and it paid for itself after just 2 summers of dawn patrol, lol.

Your credit card utilization is going to make you pay more for that loan, for sure. The 0% interest you're floating is going to be offset by the loan rate. I would suggest dumping the 0% interest balances quickly so you can get approved for the best possible rate and terms on the boat loan. Do note that depending on when you pay the balances down it might take up to an entire month before the bureaus are updated depending on when each card's balance reports.

As mentioned, you will maximize most of your FICO scores by paying all cards to $0 except for one card which reports a small balance (more than $2, less than 8.9% of limit). This can have a drastic effect on FICO scores and will help you get approved for a loan and get the best terms and rates.

Re: Which scoring model for boat/luxury item.

Anonymous — Sat, 24 Feb 2018 16:00:24 GMT

@Anonymouswrote:
A $50,000 boat for wakeboarding is fantastic -- we had one on a private lake in the Chicago burbs for many years and it paid for itself after just 2 summers of dawn patrol, lol.

Your credit card utilization is going to make you pay more for that loan, for sure. The 0% interest you're floating is going to be offset by the loan rate. I would suggest dumping the 0% interest balances quickly so you can get approved for the best possible rate and terms on the boat loan. Do note that depending on when you pay the balances down it might take up to an entire month before the bureaus are updated depending on when each card's balance reports.

As mentioned, you will maximize most of your FICO scores by paying all cards to $0 except for one card which reports a small balance (more than $2, less than 8.9% of limit). This can have a drastic effect on FICO scores and will help you get approved for a loan and get the best terms and rates.

Oh yeah. A nice 23 footer, 15 passenger about 500 hours. 1 mile from my house at a dealer.

I was told by my dad via the lender that they look at everything, of course, to determine if the loan will be granted but my score will determine the interest rate, right now anything over 720 score gets me 4.84. And they REALLY care about DTI, which I'm at 29% including my mortgage. And with the boat payment I'm at 35%.
Pretty confident at my current situation actually.

Re: Which scoring model for boat/luxury item.

HeavenOhio — Sun, 25 Feb 2018 05:52:00 GMT

@Anonymouswrote:
The 0% interest you're floating is going to be offset by the loan rate. I would suggest dumping the 0% interest balances quickly so you can get approved for the best possible rate and terms on the boat loan.

I think this is what crossed people's minds when paying down the cards was recommended, especially when the OP expressed concern about his scores possibly being borderline. I'd surmise that he's almost certainly going to be approved, but the big unknown is his ability to get the best interest rate.

ABCD, how do inquiries work for boat loans? If he shops for loans, can he take hard pulls like he would for an auto or home loan and have them treated as a single inquiry for scoring purposes? If they aren't, that would be another reason to pay down cards. It would give him a cushion to absorb some inquiries.

As far as DTI goes, paying down the cards isn't going to help much as only the minimum payment is considered. However, when lenders look at the balances themselves, they might be happier to see them at least partially erased.

Re: Which scoring model for boat/luxury item.

Anonymous — Sun, 25 Feb 2018 16:14:30 GMT

@HeavenOhiowrote:
@Anonymouswrote:
The 0% interest you're floating is going to be offset by the loan rate. I would suggest dumping the 0% interest balances quickly so you can get approved for the best possible rate and terms on the boat loan.
I think this is what crossed people's minds when paying down the cards was recommended, especially when the OP expressed concern about his scores possibly being borderline. I'd surmise that he's almost certainly going to be approved, but the big unknown is his ability to get the best interest rate.

ABCD, how do inquiries work for boat loans? If he shops for loans, can he take hard pulls like he would for an auto or home loan and have them treated as a single inquiry for scoring purposes? If they aren't, that would be another reason to pay down cards. It would give him a cushion to absorb some inquiries.

As far as DTI goes, paying down the cards isn't going to help much as only the minimum payment is considered. However, when lenders look at the balances themselves, they might be happier to see them at least partially erased.

My boat loan shows up as "auto loan" on my credit reports. I have no idea why that's the case and the lender is some small town bank who primarily does boat loans so when I emailed them they said "that's how it reports". I only had 1 inquiry on each report so I have no idea on scoring combination!

I didn't need the loan but I did it as a favor to the seller since I use him a lot. And he's offsetting 100% of interest accruing with free maintenance/dockage so it let me kinda analyze installment utilization vs FICO. Going to pay the thing off in May before the first year, I'm annoyed that it hurts my credit score and the loan is so slow to update (3-4 months old balances!) that it didn't help me analyze FICO at all.

My next boat in December is going to be a cash deal, I will never finance a vehicle again even with 0% interest. What an annoyance every month.

Re: Which scoring model for boat/luxury item.

Anonymous — Sun, 25 Feb 2018 16:28:07 GMT

@Anonymous
"My boat loan shows up as "auto loan" on my credit reports. I have no idea why that's the case and the lender is some small town bank who primarily does boat loans so when I emailed them they said "that's how it reports". I only had 1 inquiry on each report so I have no idea on scoring combination!"

Interesting that it shows up as an auto loan. I know the lender I'm going through, also a small town, just pulled TU, as least they did last year. So that is the only FICO score I pulled.

Re: Which scoring model for boat/luxury item.

Anonymous — Fri, 16 Mar 2018 11:58:53 GMT

Ok. Just an update and piece of info for anyone that happens to stumble across this thread.

I just received my credit approval letter showing my score they pulled.

It looks like the score they pulled most closely resembled my FICO AUTO Score 8.
Which was 11 points higher than my "base" FICO 8 model.

Just my experience.

Hope this helps someone later on.

Ryan

Re: Which scoring model for boat/luxury item.

Anonymous — Thu, 31 May 2018 04:06:37 GMT

I’m in the same boat, no pun intended. Looking for a new bass boat in the $15-$18k range. Did you get a loan from a CU and did they pull EQ, TU or EX?

Also, can anyone comment on interest rate(car vs boat) if lender, score etc is exactly the same? I’ve read boats are categorized differently which can cause a higher interest rate.

Re: Which scoring model for boat/luxury item.

Anonymous — Wed, 06 Jun 2018 04:23:48 GMT

I see that DCU’s lowest boat rate is in the 6’s? Ouch, is that typical for a boat loan?

Re: Which scoring model for boat/luxury item.

Anonymous — Wed, 06 Jun 2018 11:53:56 GMT

Hey there ProCharged....btw! A procharged 392 has to rip!
Here's my buddies 62 Plymouth....on E85

https://www.youtube.com/watch?v=jMKJr_o1eek&t=5s

Anyway. I went through a small Michigan bank and I have 4.24%.