Credit Rating Nonsense

ThomasH

Member

Equipment
LX2610HSDC BH77
May 26, 2020
48
43
18
Cheney, WA
Sorry, this is going to be a little long winded.

I've been debt free for a number of years, until last year when I purchased my LX2610HSDC.

I have found that credit scores matter the most when you don't have much to put down. The larger the down payment, the less the loan company cares about your credit score. And at some point, they only care if you are breathing (well, not quite, but it seems that way). Generally that point is when your down payment puts you in an equity position.

Years ago, I purchased a new wakeboarding boat from a dealer that was liquidating stock as he was going out of business. I purchased a $75,000 boat for roughly $55k, and put $12k down. At the time, I was self employed, had a credit score below 700, and was applying as stated income. There aren't many more strikes that you can get on an application.

Strike 1 - Boat loan are very high risk for lenders
Strike 2 - Low Credit Score
Strike 3 - Self-Employed / Stated income (no proof of employment)

Despite those risks, they approved me without a second thought. I had significant skin in the game with a $12K down payment, and I walked away from the deal with an equity position. Only downside is the interest payment sucked, but I planned on paying it off in 1 year or less.

But other priorities came up and 2 years later, I still had the loan with a crappy interest rate. So I went and did what almost no one is able to do. I refinanced the boat to bring down the interest rate. This is almost unheard of because banks NEVER get boat owners who have real equity in their boat. 99.99% of the time, the owners are upside down in payments, and boat loans are extremely high risk. I still had a low credit score as the boat was my only debt, but once they found out that the boat was still worth 10k more than I owed on it, they couldn't get the loan paperwork processed quick enough. That loan I payed off 1 year later.

When I bought my 2015 Diesel VW Jetta, had no problem getting 0% for 60 months because of the down payment (20%). Which by the way I got more than that back in cash due to the emissions scandal, but that's another story.

When I bought the LX2610HSDC with BH77, I had no problem getting approved for the 0% for 84 months because of the down payment (20%). I wish I had included the front mount snow blower, but I was trying to keep the payment down.

To sum it up. I really don't care much about my credit score. With a large enough down payment, just about anything is possible. I only have 1 credit card, which is a corporate card given to me for travel expenses which I haven't used in 2 years. Other than that, I have had no other credit cards for the past 12 years. I don't have a problem using credit for large purchases (vehicles, tractors, home loans, etc), but for 99% of our daily routine, it's cash only. I will NEVER EVER have a personal credit card again.

Oh BTW, you can rent a car with a debit card. You just have to know which rental company to use.
 

D2Cat

Well-known member
Lifetime Member

Equipment
L305DT, B7100HST, TG1860, TG1860D, L4240
Mar 27, 2014
9,594
691
113
40 miles south of Kansas City
From your response I'm guessing you don't know about Dave Ramsey? Or was I too obscure in my reference?
Some time back, I was listening to his radio program and decided to order a couple of books. I called and found out they do not take credit cards, only debit. So I never got them. Have one CC, that's it!
 

random

Active member

Equipment
L3301, bucket, backhoe, grader, plow, harrow, cultivator
Nov 2, 2020
393
178
43
NC
No, I knew who you were talking about but some of his listeners (aka some of my relatives) take him way to extreme and have no flex on the use of credit. So I thought I might mention it isn't some huge boogey monster if you use it responsibly or as an emergency fund you'll be fine.
I think that many people who follow him are super hard-core about credit because they've done so badly with it before.
 

random

Active member

Equipment
L3301, bucket, backhoe, grader, plow, harrow, cultivator
Nov 2, 2020
393
178
43
NC
Some time back, I was listening to his radio program and decided to order a couple of books. I called and found out they do not take credit cards, only debit. So I never got them. Have one CC, that's it!
Well, at least they run their company according to their stated values. That's pretty rare.
 

ccoon520

Active member

Equipment
L2501 w/ FEL
Apr 15, 2019
236
45
28
IA
Oh BTW, you can rent a car with a debit card. You just have to know which rental company to use.
I'd believe that.

Just the only time I actually had to have one because my car was stolen in a city pretty far from where I lived they required a credit check before I could rent one. I didn't really have much of a choice in the matter, which is why I filed it under emergency because there wasn't really much time for planning.