The Role Credit Score Plays in Solar Installations
Since solar is a large ticket item there are few and far in between that can pay for it up-front. This is why many companies in the solar industry promote getting loans for leased systems. Although a solar loan is better if you are looking to own your panels, Both of these payment options allow you to make smaller payments over time.
Why You Need a 650 Credit Score to Qualify for Our Programs
Go Solar Group has recently partnered with a new Financial Program to make the credit score requirement lower to qualify for financing. If your credit was once too low to go solar with us, now all you need is a TransUnion-verified score of 650.
Credit plays a large role in our lives. You need a certain credit score to buy a car, a home, and even qualify for a credit card.
Whether you’re a new prospect or have spoken with us before only to find out your credit score wasn’t high enough, click the button and fill out the form on the page it leads to for the area you live in below.
Which is why it should come as no surprise that credit plays a large role in solar qualification. Why You Need a 650 Credit Score to Qualify for Our Programs.
How Solar Financing Works
If you don’t pay up-front, you have opted into a solar loan or a leased array, sometimes known as a Power Purchase Agreement (PPA). This means that over a set amount of years you pay a certain amount each month toward solar. This bill, essentially, replaces your utility bill.
Although the monthly payments for a leased solar array are less, you end up paying more overall. The worst part is that afterward you still don’t own the system.
Acquiring a Solar Loan
When you apply for a loan they look at your debt-to-income ratio and credit score. This helps lenders determine if you have a history of paying off your debts and if you have the income to pay more, though a certain income requirement is not mandated in being qualified for one of our financing company’s programs.
Solar actually costs less than what you would have paid your utility over the life of your solar array. However, lenders don’t care that solar isn’t actually an added expense. This means you need to have a certain credit score to qualify for the loan.
What Credit Score You Need to Qualify for Solar: 650
What credit score you need is dependent on the loan. Solar companies work with different lenders and each has their own qualifications. However, with Go Solar Group, the standard is 650.
Go Solar Group’s New Solar Loan Partner
In 2019, Go Solar Group switched loan partners. Loan pal, Go Solar Group’s new lending partner, offers loans to individuals with credit scores as low as 650.
This is 20 points lower than we’ve used before. Which means, if you didn’t qualify for solar in past, you might qualify now.
TransUnion Vs. Self Reported Credit Scores
When Go Solar Group qualifies you for solar, they may ask you for a self-report score if your credit does not pull up in TransUnion through the verified information you provided the internal solar consultant. Because estimated scores are normally high, self-estimated scores need to be at least 675 with Go Solar Group.
How to Boost Your Credit Score to Qualify for Solar Power
If after looking at your credit score you find that you are still not quite where you want to be, there are some things you can do to increase your credit score, which are outlined below.
Most Commonly Used Credit Score: FICO
Of the different credit scores, your FICO score is the score that matters the most to lenders. This is because the FICO score is used by 90 percent of top lenders.
Components of the FICO Score
There are five categories that directly affect your FICO score. Of your score, 35 percent is determined by how timely your past credit payments were. Another 30 percent of your score is calculated from how much of your available credit you are using.
On the smaller end of the spectrum, 15 percent comes from how long you have been using credit. And the last 20 percent is split between your mix of credit lenders and recently acquired credit.
How to Raise Your Credit Score
One of the best things that you can do for your credit score is to consistently make your payments, and more than the bare minimum. If you have a hard time staying on top of your bills you can set up reminders on your phone or automatic bill pay.
The second best thing for your credit score is to start paying off your debt not just moving it around. Although moving your debt to a different card may solve the problem short term it won’t be lasting. In fact, it is enabling you to accumulate even more debt that you can’t afford.
The third thing that you can do is to keep your credit card balance lower than your credit limit. When you do this it tells lenders that you are responsibly borrowing money.
How to Check your Credit Score
If you check your credit too much then you can actually negatively impact your score. This is because if you aren’t using the right sources it is seen as a hard credit inquiry. To a lender, this looks like you are desperate and may not be able to pay off the loan amount.
However, if you are checking your credit in the right places you don’t have to worry. This is because these are soft polls which don’t affect your FICO score. Often banks and credit unions do a soft pull to provide customers with their current credit score at the end of each month.