from OneMain Financial
OneMain Financial: What Credit Score Is Required to Finance a Pool Installation?
NEW YORK, NY / ACCESSWIRE / March 4, 2024 / Homeowners considering getting a new pool will have much to budget for, especially if they want an inground pool. One of the most expensive steps of the entire process will be the installation.
In addition to physically putting the pool into the ground, contractors will have to survey, excavate, and lay out the filtration system. Depending on the overall scope and location, this could get expensive quickly.
Homeowners wishing to install a pool don't necessarily need to have all of the required money upfront, as they may be able to qualify for pool financing. Here's what they'll need to know.
Methods to Finance a Pool Installation
Qualification requirements for pool financing may vary by lender and can hinge on factors such as credit score and loan type. Some common financing methods:
Home Equity Loan or HELOC
Home equity loans and HELOCs (home equity lines of credit) are two widely used ways for homeowners to tap into the equity in their homes and use it for any reason they see fit (including purchasing a new pool). Equity is the portion of the home's value that the homeowner would keep if they were to sell their house and pay off the remaining mortgage balance.
With a home equity loan, the borrower receives funding in one lump sum and pays it back in fixed monthly installments (with interest).
A HELOC, on the other hand, is a secured loan that can be used to make large purchases, and is repaid by borrowers in two phases. The first repayment phase is the draw period, during which the borrower can access funds and make interest-only or minimum payments, and the second is the repayment period when the homeowner repays both principal and interest on the outstanding balance over a fixed timeframe.
With both types of loans, the homeowner secures the loan using their property as collateral. Collateral is something of value that the lender can seize if the borrower defaults on their payments. According to Equifax, many home equity loan and HELOC lenders prefer applicants with a minimum FICO score of 680 or higher.
Pool loan
For the borrower who wants to avoid putting their home up as collateral, another type of loan to consider is a pool loan. A pool loan is a personal loan used specifically to finance the purchase of a swimming pool. This type of loan comes with a fixed interest rate and is paid back with regular installments paid over the loan's lifetime, typically between 2 to 5 years.
Generally speaking, personal loan lenders are more flexible and are willing to accept applicants with a FICO score of 600 or higher. Some lenders offer pool loans that can be either secured and unsecured, meaning that with the latter, the applicant will not need to provide any collateral.
How applicants may be able to increase their FICO score
The homeowner who wants to increase their chance of qualifying for a pool loan and score a better Annual Percentage Rate (APR) might be able to improve their credit score by doing some or all of the following:
- Pay bills on time: Timely payment of bills, including credit card balances, loans, and utility bills, is crucial for maintaining a positive payment history.
- Reduce credit card balances: Aim to keep credit card balances low relative to the associated credit limit, as a high credit utilization rate can negatively impact an individual's credit score.
- Keep old accounts open: Closing old credit accounts can shorten the length of credit history, so it's could be beneficial to keep them open, even if they're not actively used.
- Limit new credit applications: Multiple credit inquiries within a short period of time can lower a credit score, so it's wise to limit submission of any new credit application until it's necessary to do so.
- Monitor credit reports: Regularly review credit reports to check for errors or fraudulent activity, as addressing inaccuracies promptly can help maintain a healthy credit score.
- Diversify credit mix: Having a mix of different types of credit accounts, such as credit cards, installment loans, and mortgages, can positively impact an individual's credit score.
- Use credit responsibly: Responsible credit usage involves borrowing only what can be comfortably repaid and avoiding maxing out credit limits.
- Seek credit counseling: If struggling with debt or credit management, consider seeking guidance from a reputable credit counseling agency to develop a plan for improvement.
The Bottom Line
Installing a pool can be expensive and may require the homeowner to seek additional funding. The minimum credit score needed to get financing will depend on the lender and type of loan being applied for.
Applicants worried that their credit scores may need to be higher should take steps as soon as possible to improve them, such as setting their bill payments to auto-pay, lowering credit usage, and not applying for any other new lines of credit.
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About OneMain Financial
OneMain Financial is the leader in offering nonprime customers responsible access to credit and is dedicated to improving the financial well-being of hardworking Americans.
Sources: https://www.experian.com/blogs/ask-experian/what-credit-score-do-i-need-to-get-a-home-equity-loan
https://www.creditkarma.com/personal-loans/i/personal-loan-credit-score
Contact Information
Keyonda Goosby
Public Relations Specialist
keyonda.goosby@iquanti.com
(201) 633-2125
Sonakshi Murze
Manager
sonakshi.murze@iquanti.com
SOURCE: OneMain Financial
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