The Credit Score of an Owner-Operator

When it comes to getting a loan, there are numerous factors. The factor that impacts the other factors the most, however, has to be credit score. A credit score can be the difference between a double-digit and a single-digit loan on your truck, or the difference as to whether or not you get a loan at all. What credit score does an owner-operator need to put another truck on the road and raise his revenue?

Statistics

In mid-January 2020, OverDrive Online conducted a poll that says owner-operators tend to have fairly solid credit: 79% of owner-operators have a credit score above 650, and 46% have a credit score above 650!

But not so fast: this data is inaccurate. If you have a lower credit score than 650, here are some aspects of this poll that you might want to consider before feeling down:

1. The poll was multiple choice: people could choose any option they wanted. Someone might “remember” that their credit score is higher than it actually is.
2. The poll, based on the title, assumes everyone who votes in an owner-operator, but there was no gatekeeping for the poll: any person could go to the website and vote.
3. Overdrive Online’s readership base tends to lean towards more owner-operators who take a particular interest in reading about the industry, and as such do not accurately portray the industry as a whole.
4. Just because someone’s credit score is higher or lower does not mean they are looking for financing.
5. These numbers do not portray whether or not the people were able to obtain financing.

Surely there is a more accurate method of finding out the credit score needed to have a good chance of financing.

TopMark Statistics

As a financing company, we at TopMark Funding keep track of the statistics regarding the applications we receive and the loans we give out. Our data resolves the five issues the OverDrive Online poll could not prevent.

1. The only way to have your result count was to have your credit (softly) pulled, so fabricating scores is impossible.
2. Only people who applied and authorized the soft credit check are part of the results, so the gatekeeping standards are above and beyond just clicking on an option and hitting “submit”.
3. TopMark’s base is towards people interested in obtaining commercial vehicle financing, which may cause the results to skew from the true national representation, but is almost certainly closer than polling a viewership base of truckers strongly interested in the industry as a whole.
4. Everyone in the data wanted to obtain financing, otherwise, they would not have filled out the application.
5. We can tell who obtained financing.

Here is what we found from TopMark Funding’s statistics for 2019:

• The average FICO score for a funded transaction was 677
• The median FICO score of all funded transactions for 2019 was 678.
• The most common application FICO score for funded transactions was 679.
• The fact that the median and average are close to one another shows that the data points for funded loans are (most often) not skewed in either direction above or below the high 670s.
• Of all applications in 2019, those at or above 677 were over three times as likely to be funded than those with credit scores below 677.
• There are over three times as many total applications below 677 than at or above 677 (but you could infer that from the above bullet points as well, since below 677 has roughly the same number of funded transactions but a third of the funding rate).

Conclusion

OverDrive Online is a great website with many high-quality articles, but their method of gathering data leaves a lot to be desired. For example, an open poll with which anyone can vote cannot be used to generalize a specific group, such as owner-operators.

With our 2019 funding data, we see that having a credit score at or above 677 will make your terms more likely to be acceptable (lower down payment, longer duration, lower interest rate, etc.), but even people with a credit score near the bottom can still find financing, albeit rare. Regardless of your credit score, TopMark Funding does soft credit checks, meaning it cannot hurt to try. Do not let this distribution discourage you if your score is between 300 and 676, and, if you don’t like the terms you get for a lease or loan, work hard to raise your credit.

CHECK OUT THESE OTHER GREAT TRUCKING ARTICLES

• Trucking in 2020 and Beyond
• What is a Soft Credit Check
• Section 179 Deduction [2020]
• Truck Engines: Guide for Commercial Truck Engines

ABOUT TOPMARK FUNDING

TopMark Funding is a top-rated truck financing and equipment financing company located in Roseville, CA. We specialize in commercial trucking and heavy equipment. Our mission is to become your long-term financial partner by helping you grow your trucking business and fleet.

We’re not here for the short-term, we’re on the long-haul with you!

We have financing options for commercial trucks, trailers, and small businesses. We have great rates, low down payments, and flexible monthly payments regardless of credit history.

Learn more about: How to Get Commercial Truck Financing

Fill out the contact form or give us a call at (866) 627-6644. One of our truck financing specialists will contact you as soon as possible to go over your truck lease needs and learn more about you and your business financing goals.

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