Credit score for buying a boat or rv

What FICO bands most marine lenders actually work with, and where the friction starts. Most marine lenders consider PRIME Credit to be from 740 and up. 800 + being the best, and 720 down to 660 moving into "Sub Prime" territory. Things are different here in the "Recreational lending" world. When we start seeing scores below 740, there are usually reasons for that that make the banks get weary. After all, we are talking about financing a toy.

Hey! My name is Scott Bradshaw, and I want to talk to you about credit scores and how they affect your ability to get a loan for that boat or RV.

Why listen to me?

I own YourBoatMoney.com and write loans all over the country. I’ve been in the lending business for over a decade and as such I’ve seen credit scores from 460 to 860 — and I’ve read thousands of credit reports.

Disclaimer: I am not a credit counselor. I’m not a FICO engineer. But I am someone who sees what leads to approvals… and what leads to declines.

The school-grade analogy

Credit scores are like grades in school. An A on a report card? It looks great at first glance — just like an 800+ credit score. In my world:

A credit: 800+
A-minus to B credit: 740–799
C credit: 720–740
D credit: 700–720
F credit (subprime): below 700

But if you’ve ever applied to college — or gone after a great job — you know they often want your transcript, an essay, and an interview, not just the letter grade. Why? Because a one-letter grade doesn’t tell the whole story. It matters how you got there. Same with credit. The score opens the door — but lenders still want to see what’s behind it.

Some students were naturally gifted and the A’s came easy. Others fought HARD for every A or B. And the C students? Smart — just not interested in what school was offering. Then there were the D and even the F students…

BTW — there is a great book by Robert Kiyosaki called “A students work for C students, and B students work for the government.” I love that book.

Back to the analogy. Some of those A students (800+ scores) went on to be great employees. Engineers. Accountants. Some even went on to grow established businesses and become CEO! And it just seemed easy (even though it may have been VERY hard to get there).

By the same token, some of those “average” students (740+ scores) also went on to run amazing businesses, build wealth, and live free. They just happened to treat school like a checkbox — something they had to do. Credit can be that way as well. You KNOW that it would be great to have an 800+, but you just don’t see a way to make it happen, or you don’t think it is that important… or maybe you just don’t know HOW to get there!

What goes into your FICO score

Different FICO models will weigh these differently, but this is a good general overview:

Payment History — 35%: Making your payments on time.
Credit Utilization — 30%: If you have a limit on a credit card, how much of that are you using?
Credit Age — 15%: Have you had accounts open for some time, or are they new?
New Credit — 10%: New credit can KILL your chances at getting a boat loan. More on that later.
Comparable Credit — 10%: Later on we will discuss this with a gym analogy.

FICO explains the breakdown in its own words here: What is a FICO score?

The two biggest score killers

Here’s what I’ve learned: two things tank credit scores more than anything else:

High use of revolving credit. If you’re constantly above 50% of your available limit, it drags your score down — fast. Decrease your usage of revolving. What is revolving credit? We all know credit cards are — BUT things like a “0% for 24 months” at Best Buy are revolving. “0% interest for your new furniture for your home?” IMMEDIATE 100% use of revolving. And the secret silent killer? Home equity lines that are maxed out or close to it. HELOCs are revolving credit. HE loans are not. There IS a difference.
Missed or late payments. Just one late payment can hurt you for 7 years!

Let’s face it — recreational lenders (boats, RVs, aircraft) are loaning for TOYS. And toys are NOT something that we NEED. Banks do NOT like to loan money for toys if you have a history of late payments on ANYTHING in the last 7 years. Sorry, but it’s the truth. Even if “It wasn’t your fault.” If it shows on your credit, then it most likely was your fault. If not, call whomever is reporting it and file a dispute! BUT it will STILL show on your credit unless THEY REMOVE IT! (Good luck with that.) Although I have seen it happen on occasion where something was being reported improperly and my customer got it fixed — and their score jumped 60 points in 3 days! That is NOT the norm.

Oh — and on that subject — paying off a credit card that has historically had a high balance will NOT automatically raise your score! The credit scoring math will just say that you will likely go right back into that debt again soon. And get this — an open HELOC, let’s say for $300,000, that is a DEAL KILLER for most! The bank sees an open line of credit that you could go write a check for tomorrow and get an additional $300k into debt? No bueno.

Comparable credit: the gym analogy

Next up — lenders want to see comparable credit. What does that mean? Now we get to my gym analogy. If you train a muscle, it gets stronger. Same with your credit profile.

Let’s say you want to squat 500 pounds when you’ve never squatted 200 lbs. You have to start off with the weight you CAN lift and work up to the weight you WANT to lift. If you have only ever had a small credit card and let’s say a $25,000 auto loan — you are NOT getting a $100,000 boat loan. Even if you have enough cash to pay for the boat outright. I mean, good for you having that kind of cash and NOT needing credit in your life! I could use a lesson on that for sure. BUT having a lot of cash in the bank doesn’t override a thin or weak credit profile.

In recreational lending especially, cash does not equal credit. The banks just do not see the “strength” in your profile to support your “ability to repay.” You need to show you’ve trained for the kind of loan you’re applying for. Is it 1-for-1? Not really. If you had a $100k loan on a boat and a large mortgage (that has seasoned — i.e., at LEAST 2 years old with good payment history), then you are good for let’s say, $200k or maybe $300k.

Watch out for new debt

OH and I mentioned NEW credit earlier. If you just bought a home 9 months ago, and a new car 3 months ago… your chances at a new boat loan are severely diminished UNLESS you have an AMAZINGLY strong credit profile and a great down payment! Taking on that much NEW DEBT that has not yet “seasoned” can be the kiss of death! That is a lot of “weight” on your shoulders. (Back to the gym…) But once that has seasoned for a while, it certainly makes you stronger.

Taking on new debt — home equity line, new car, new home, new boat, new credit cards, etc. — with NO repayment history yet WILL lower your score. A lot. A new home could easily drop your score 20–40 points for a while! And if you stack them… well, that can be really bad.

Wrapping up

I could ramble on and on I’m sure… and if you want to know more, please feel free to reach out!

At YourBoatMoney.com, we help clients understand how credit really works — and how to position you for success. Because your score is a window — not the full picture.

We will try to help you fill in the gaps and build a great story. And most importantly — we make sure you’re never alone when you need a loan.

Scott Bradshaw
Your Boat Money

What Credit Score Do I Need for a Boat Loan?