Of all the factors that determine your eligibility for an aircraft loan, your personal credit score is one of the most important. It is a direct reflection of your financial history and your reliability as a borrower. A strong credit score not only increases your chances of approval but also directly impacts the interest rate and terms you will be offered.
What is a "Good" Credit Score for Aircraft Financing?
Aviation lenders generally place borrowers into tiers based on their FICO score:
- Tier 1 (Excellent): 740+
- Tier 2 (Good): 700 - 739
- Tier 3 (Fair): 660 - 699
While it is possible to get a loan with a score below 660, it becomes significantly more challenging and will almost certainly require a larger down payment and result in a higher interest rate. The best rates and terms are reserved for Tier 1 borrowers.
How a Higher Score Gets You a Lower Rate
The correlation is simple: a higher credit score signifies lower risk to the lender. To a lender, a borrower with a 780 FICO score has a proven history of paying their debts on time and is statistically less likely to default. To compete for this low-risk business, lenders will offer their most attractive interest rates. A difference of 50 points on your credit score could easily translate to a 0.5% or even 1.0% difference in your interest rate, saving you thousands of dollars over the life of the loan.
Know Where You Stand
Getting pre-qualified includes a soft credit pull that won't affect your score. It's the best way to understand how your credit profile looks to lenders before you start shopping.
Get Pre-Qualified TodayHow to Prepare Your Credit Before Applying
Before applying for an aircraft loan, it's wise to review your credit report. You can get a free copy annually from the major credit bureaus. Check for any errors that might be dragging down your score. If your score is lower than you'd like, focus on paying down balances on revolving credit (like credit cards) and ensuring a consistent history of on-time payments for all your existing debts.