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Excellent credit score doesn’t guarantee RV financing

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bpaikman

RVF Supporter
Joined
Jun 25, 2020
Messages
914
Location
Lake Jackson, Texas
RV Year
2014
RV Make
Newmar
RV Model
Ventana LE 3436
RV Length
35 feet
Chassis
Freightliner
Engine
Cummins 340 hp
TOW/TOAD
2013 Subaru Crosstrek - manual, flat tow
Fulltimer
No
After YEARS of research, and months of market-stalking, we found a coach!
We started the process, and were stopped dead because we can’t get financing. Our credit score is excellent.
As soon as we sold our last coach in early 2018, we started saving for the next one, and finally reached our goal this year.
HOWEVER, we had saved it in a 401K that was being matched by employer, (plus putting all our previous MH payments into it.)
No penalty for withdrawal at our age, but we can’t yank out all the investment at once, because it would put us in a higher tax bracket, so we planned to finance about 80%.
We’ve been turned down, because as best we can understand, we’ve not financed any ‘big-ticket’ items since 2017 ( not THAT long ago!) when we sold our MH.
I stewed over it for a while, but slowly realized I could understand their position. RVs are overpriced, they don’t know one from another. They’d hold the title to something that rapidly depreciates, and could be wiped out in seconds with a bad accident or natural disaster.
I’m thinking we should get our kids to finance it, and we can pay them off.
But we’re pretty bummed.
USAA financed our last coach, but since Covid, their new policy is they won’t finance more than $25K on any RV.
So, oir next plan is to save some more, let our investments grow until $25K is all we need to finance. That will take a few more months - hoping prices come down and meet us halfway.
Maybe we dodged a market bullet anyhow.
 
Are you buying new or used? Used financing can be more challenging but new is typically easier. Maybe @Jireh Financial has some thoughts.
 
You might check Essex Credit a division of Bank of the West.
 
Yes. I was completely debt free for years, excellent credit score, paid cash for last MotorHome, all bills paid on time. Banks reasoning? No recent credit history. Credit card is paid off twice a month, etc. It almost does not pay to be debt free these days. I think I will drag the payments on this one until I am ready to trade. Ridiculous.
 
Good morning,
I did not know that about USAA, interesting. Your prior loan history is 2017 is not that long ago. We work with lenders that are "in" the RV and lending business. Most all lenders have some sort of program but it might not be all that good. The way investment accounts are growing, taking big amounts out is a tough call. Losing the compounding interest on what is gone can hurt in the long run. With good credit a person can often out earn the rate on a loan.
We would do our best to help.
I am out of my chair until Wednesday but working remote. My email is below or you can send a private message if you want to talk about a plan.
Let me know how we can help.
Thank you,
Ken
 
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To be clear, I am not a Dave Ramsey fan but he is correct in saying that a credit score is in actuality a “debt score”. They do not reward people who are debt free. When we retired, we sold our home, took what we cleared and purchased outright a new much smaller home. After a few months our “credit scores” dropped by 40+ points because we no longer have a mortgage. You just can’t make this stuff up.
 
This is why we keep and use two credit cards for all of our purchases. We have no other debt; no mortgage, no car or RV payments or other installment loans, etc. and still manage to maintain a good credit score. I think the monthly credit card activity (we pay the balance off each month) may be the reason.

It is a sad commentary on our fiscal world that people who pay their bills on time and stay debt-free are frequently considered poor credit risks. :mad:

TJ
 
One of the things to remember here is there is no magic bullet credit score. Credit score only "tiers the loan". That is how the rate is arrived at. The approval process takes several things into account. Loan history is absolutely a help in getting a loan. Credit history with the necessity things like home and auto. Things like RV's, for the most part, are considered extras or discretionary. The standards are different than the other things.
The best example of this is with younger people. They might have a CC with a $1,000 limit and a small auto loan for $10,000. That person will "score" very well. Great score but untested. Does that mean they can borrow $50,000 for an RV? No it does not. The next person can score much lower but have solid loan history and be better qualified in the eyes of some lenders because of the history. Score is only one small part of the approval process.
These are great conversations.
Holler if we can help.
Ken
 

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