Credit Reports and Your RV Loan Application

When applying for virtually any loan, the potential lender will pull a copy of your credit report to determine your credit-worthiness based on several factors. Here we will try to help you become familiar with what lenders look for in evaluating a typical credit bureau report.

If you are considering applying for an RV loan, you should first be familiar with your current credit report. You should pay careful attention to its contents and payment history information as well as your credit score, as shown by each of the three major credit-reporting agencies.

The Three Main Credit Bureaus Are:

1. Equifax
2. TransUnion
3. Experian

Federal law allows you to get a free copy of your credit report every 12 months from all 3 of the major credit reporting bureaus. You can obtain a free copy of your credit report by contacting each of the bureaus individually, or, you may choose from AnnualCreditReport.com or CreditKarma.com. They offer various credit report programs, ranging from free to paid monthly credit report monitoring.

Inaccuracies or Errors

When you receive your reports, you should check each account for errors, and that all information is up-to-date and accurate. Our experience has shown that errors and inaccuracies are relatively common.

By correcting any disputed or erroneous information before you apply for an RV loan, you will save time and help reduce the number of credit inquiries shown on your credit report.

RV Credit Inquiries

Excessive credit inquiries in a limited amount of time may be enough of a reason for a lender to decline your RV loan application, so be aware of any potential lending sources that may pull your credit report.

You should also try to do your homework and rate-shopping first, before applying with multiple lending sources. This will help limit the credit inquiries shown on your bureau. Then pick the one or possibly two sources you might consider for your actual loan application.

Excessive or Unused Credit Limits

Having multiple credit cards and "maxed-out", or charged to the account's limit is a negative factor when being evaluated by potential lenders. But, having multiple credit cards or lines of credit open, even with low or no balances can be viewed positively by a potential lender; even though this was once thought of as a negative factor.

If you have several rarely used or unused accounts, you may consider keeping these cards open, but with no balance. But if you do close any credit or charge accounts, be sure to ask that the creditor lists the account as "closed at customer request", to avoid any confusion about the reason for cancellation.

It is usually best to maintain a few, well-managed credit card accounts, rather than accumulate a large number of unused accounts with high balances. This can be considered potential debt, and also negatively affect your ability to secure a loan for an RV.

30, 60 and 90-Day Late Payments

Your credit report will show the number of payments made for each account listed. It will also indicate any payments that were made late, particularly if they were over 30 days, 60 days or 90 days late, with each late payment category being considered worse than the previous.

Many RV lenders may overlook one or two 30-day late payments on non-essential items such as credit cards or department store cards. Any late RV loan payments, auto or especially mortgage accounts are commonly considered reasons for a decline.

Your potential creditors are most interested in timely payments over the last 2 to3 or more years, with some RV lenders looking back as far as 5 to 7 years for any infractions.

RV Credit Report Summary

A yearly review and basic understanding of your credit report is a part of smart credit management. If the lender thinks you shouldn't be purchasing a particularly large item, you may want to consider if you are really able to pay for it in a timely manner.

Building good credit is a process that takes place over many years, so do your homework and take good care of your credit history. Remember, it takes years to build, but only a few bad months to completely destroy for your credit rating years to come. Whether you're considering an inexpensive item or large RV loan, always invest wisely and keep your credit score high.

Learn, Save and Enjoy!

Barry Wilder
Best Rate Motorhome Financing
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