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The interest rate lenders charge is primarily based on your credit score. The better your score, the lower the rates. Start checking your credit well before you begin boat shopping to give yourself a chance to improve your score. Lenders prefer borrowers with low balances, a long history of on-time payments, and a mix of credit utilization, (e.g., a loan payment and a couple of revolving accounts, such as credit cards). Keep in mind: your credit score is affected by five factors:

  • Payment History (35% of total score)
  • Amounts Owed (30% of total score)
  • Length of Credit History (15% of total score)
  • New Credit (10% of total score)
  • Types of Credit (10% of total score)