Ugg... really jacked at my bank right now! Decline with perfect credit.

[Fantanos]

I own a small business, 30 employees and gross sales over $2.2 million a year. I have been in business for 10 years. I have been with my current bank now for 3 years and I run an average of $150K a month through my checking account at that bank, the other amount goes through my Paypal account. I have one loan with my bank and it has never been late and is past 50% paid off.

 

I applied for a small lease of $35K and I was declined for "derogatory credit"

 

My credit score last month was 715, so I just ran it today and it is 724. How much better can I get it??? What an insult.

 

No my only downfall is 4 years ago things where a little tighter and I let a few payments slip, my credit fell into the 500's for late payments. Once I was aware how bad it got I fixed it. So in 4 years I have not had a late payment, all credit cards are paid off each month and my score has been 690+ for 4 years.

 

The other kicker is I needed some new manufacturing equipment so I applied for a lease with another company last week that was recommend by the machinery dealer. I was approved for $120K in 15 minutes and in 3 days the machines were paid for.

 

Why is it our local banks are so ignorant? With millions of dollars a year going through their bank a reject on a $35K lease with low risk credit is an insult.....

 

Rant over. Thanks for listening.

[camus154]

724 isn't perfect credit. And no matter what your score is, those late payments are still going to show up on the report if this was 4 years ago.

[LoveHim]

I agree with you Fantanos, I am currently in WA as well. I have had a similar experience recently.

 

I decided to go get a car loan, I know my credit score is 735

 

The Credit Union BECU told me they would only give me 25k for a car...so I went to a dealer in Tacoma, a dealer that I have friends and family that work there. They ran me and could give me double that through BECU!! So what did they do different?!?! How come a branch of BECU would only give me 25k yet when my cousin called them (He is finance at the dealer) they told him I could have 50k for a car??

 

Frustrating!! Still got my Jeep though

[Fantanos]

724 isn't perfect credit. And no matter what your score is, those late payments are still going to show up on the report if this was 4 years ago.

 

I agree 724 isn't perfect but it is pretty darn good. Usually anything over 700 is very good and low risk.

 

The problem is it is very hard to have perfect credit being a business owner, not because of late payments but debt ratio. I have a lot of installment loans that are business paid that show up on my personal credit. Too many installment loans bring your score down and too many inquires. I have both business and personal inquires which means double the inquires on my credit. Most banks working with a business understand this...

 

I also understand old late payments, they will haunt me for a long time. However since then I have purchased 4 new cars and like I said got approved for $120K loan last week...

[pl3asehelp]

Well you could always try some other banks, but I doubt it's anything to do with your local banks ignorance. Banks follow a formulaic approach and credit score is just one input they plug in to their algorithm. I bet you'd get the same response from any bank in the states. Purchasing 4 new cars and taking out another loan may have put you over the edge.

[camus154]

Because some banks are being more conservative about what they're willing to loan you.

 

Instead of being insulted about it, perhaps you should consider it a blessing in disguise. Do you really need a 50K credit line on a car?

[Fantanos]

I agree with you Fantanos, I am currently in WA as well. I have had a similar experience recently.

 

I decided to go get a car loan, I know my credit score is 735

 

The Credit Union BECU told me they would only give me 25k for a car...so I went to a dealer in Tacoma, a dealer that I have friends and family that work there. They ran me and could give me double that through BECU!! So what did they do different?!?! How come a branch of BECU would only give me 25k yet when my cousin called them (He is finance at the dealer) they told him I could have 50k for a car??

 

Frustrating!! Still got my Jeep though

 

Local banks are rough... I don't know if I will apply for anything at them again.

 

My younger is still new to credit. Her bank which is also my bank declined her for a $4500 car loan, however she was approved online with very low interest at another bank in a matter of minutes.

 

I am just so upset at my LOCAL bank.

[Fantanos]

Well you could always try some other banks, but I doubt it's anything to do with your local banks ignorance. Banks follow a formulaic approach and credit score is just one input they plug in to their algorithm. I bet you'd get the same response from any bank in the states. Purchasing 4 new cars and taking out another loan may have put you over the edge.

 

Yes other banks are the option. Just upset at my local bank, they called me for funding last week, and this is what I got. I guess that is why I am upset.

 

Yes the auto loans are called installment loans and hurt my score, they are all company vehicles and one is actually paid off. The other big loan hasn't shown up yet so they aren't aware of that. But even it had there reason was just my credit wasn't good enough.

 

Anyways just ranting about trying to keep business local and this is what you get.

[LoveHim]

Because some banks are being more conservative about what they're willing to loan you.

 

Instead of being insulted about it, perhaps you should consider it a blessing in disguise. Do you really need a 50K credit line on a car?

 

I don't NEED 50k credit line but to get the Jeep I wanted 25k wasn't enough. I never settle for less than what I feel I deserve or what I want, I have a good job and can afford it. I own my own home and have no debt other than utilities...I manage my money to make it possible for me to get the nicer things in life and not have to settle or suffer with payments I can't handle. I like having the option to spend 50k on a car if I am in the mood

[camus154]

Just out of curiosity, what's your actual profit margin? You said sales gross 2 million or so a year, but how's your profit in comparison? Is there a reason why you have so much debt in rotation?

 

I don't NEED 50k credit line but to get the Jeep I wanted 25k wasn't enough. I never settle for less than what I feel I deserve or what I want, I have a good job and can afford it. I own my own home and have no debt other than utilities...I manage my money to make it possible for me to get the nicer things in life and not have to settle or suffer with payments I can't handle. I like having the option to spend 50k on a car if I am in the mood

 

This is exactly how people wind up going broke, just so you know. Forget about what you feel you "deserve"--what can you afford? The fact that you need more than a 25K loan for a Jeep tells me you have nothing saved up as a down payment for the vehicle. So you're looking to finance it all.

[Fantanos]

Just out of curiosity, what's your actual profit margin? You said sales gross 2 million or so a year, but how's your profit in comparison? Is there a reason why you have so much debt in rotation?

 

We are working on our 2012 profit #'s now, it is not bad but could be better. This is why we purchased some new equipment, we are able to reduce monthly cost by around $5k with the newer equipment. (More automated, faster ect).

 

Actually besides this new loan I just got and a couple small loans(mostly autos) I have very limited debt. All my other machinery is paid for in full. All company vehicles are paid around 3/4.

 

The nice thing about a lease is under a certain dollar amount is they don't look at profit since they don't require financials or taxes. They look at my personal credit, sales, business length, Dunn and Bradstreet.

[LoveHim]

Just out of curiosity, what's your actual profit margin? You said sales gross 2 million or so a year, but how's your profit in comparison? Is there a reason why you have so much debt in rotation?

 

 

 

This is exactly how people wind up going broke, just so you know. Forget about what you feel you "deserve"--what can you afford? The fact that you need more than a 25K loan for a Jeep tells me you have nothing saved up as a down payment for the vehicle. So you're looking to finance it all.

 

Back when I was married my ex was bad with money...I have lived the broke life. I will never go back to that. I make sure that I can afford what I buy, I don't buy things that I will regret. I don't throw money around. I save, I save a lot...when the time comes that I see something I like or want (which isn't too often) I get it. I don't believe there is anything wrong with treating myself to things I feel I deserve. I work hard for that reason, I make good money and I always think ahead before making any large purchase. This was my first car purchase since 2001...it's time I get a car I feel I deserve.

 

I have money in savings, I could have paid cash for it...but why? I have always financed a car, made a few payments...payments in between payments and ended up paying it off within a few months or within the year (unless there was an early pay off fee, then I would wait for that fee to not apply and then pay it off) What's good about having credit if you don't use it? By having these type of actions on my credit it's good.

[camus154]

I have money in savings, I could have paid cash for it...but why? I have always financed a car, made a few payments...payments in between payments and ended up paying it off within a few months or within the year (unless there was an early pay off fee, then I would wait for that fee to not apply and then pay it off) What's good about having credit if you don't use it? By having these type of actions on my credit it's good.

 

Why pay in cash instead of credit? Interest, in a word.

 

Having good credit is overrated and serves only one purpose--making sure you can borrow. If you have enough money where you don't NEED to borrow, then why worry about maintaining good credit?

[LoveHim]

Why pay in cash instead of credit? Interest, in a word.

 

Having good credit is overrated and serves only one purpose--making sure you can borrow. If you have enough money where you don't NEED to borrow, then why worry about maintaining good credit?

 

Interest isn't that bad, the better credit you have the lower the interest. My loan was at 2.25%, I am really not too worried about how much interest that will throw on the top of my loan. Now if you have bad credit and finance a car at 23%...then ya, that's just stupid.

 

You never know when you will need credit. I have to think about the future...what if something happens to my home or I just decide I want to buy a new one?! I need credit.

 

To be honest...Why would I not maintain good credit?? Think about the future and the things that could happen...most of the time you need the credit when you don't have it, I find it's better to maintain it than to worry and stress about what to do if something does happen. I am prepared for the worst that way.

 

How many people have you known that drive their cars until they die...don't maintain their credit, then when they truly need a new car...they can't get a loan for one?? I know a lot of people like that and I refuse to be one so I am just being proactive.

[camus154]

Interest isn't that bad, the better credit you have the lower the interest. My loan was at 2.25%, I am really not too worried about how much interest that will throw on the top of my loan. Now if you have bad credit and finance a car at 23%...then ya, that's just stupid.

 

But think about it--ANY amount of interest, no matter how low the rate, is still more expensive than cash, right? Why would you voluntarily pay 2.25% interest when you could pay 0% by paying in cash? In effect you're saying it's worth it to pay a surcharge to maintain "good credit."

 

You don't need to finance everything in order to maintain credit, regardless. If you have a mortgage, you have a credit history. Why not keep one credit card that you pay off every month instead? That way you maintain your credit and you don't pay any interest.

 

How many people have you known that drive their cars until they die...don't maintain their credit, then when they truly need a new car...they can't get a loan for one?? I know a lot of people like that and I refuse to be one so I am just being proactive.

 

Again, this relies on credit as the only means of purchasing something. In this example, what if the person driving the clunker into the ground has enough cash on hand to purchase a new vehicle when the clunker dies? The assumption here is that people will always need to rely on credit rather than saving and being financially squared away for the disaster.

[LoveHim]

I do have a credit card that I use monthly and pay off as well. Every little bit helps. I don't see the big deal about a little extra to finance a car, it doesn't hurt my bank account.

 

As far as the guy driving the clunker...everyone that I have know has never had the cash to go out and buy a car, they have always tried to finance and they always get turned down because of their credit. Most of them have had to scramble up what little they can and go buy another crappy car.

 

Like I said, I am proactive...I have cash if needed and I can finance what I need to IF I need to. It's how I have set myself up in life and I am extremely comfortable financially.

[camus154]

I do have a credit card that I use monthly and pay off as well. Every little bit helps. I don't see the big deal about a little extra to finance a car, it doesn't hurt my bank account.

 

I still don't understand this logic. You're giving away money for absolutely no reason. The millionaire next door is the guy driving that clunker into the ground, not the person who figures a low interest rate is "no big deal". Again, why pay more money than you need to? That's simply throwing money away.

 

As far as the guy driving the clunker...everyone that I have know has never had the cash to go out and buy a car, they have always tried to finance and they always get turned down because of their credit. Most of them have had to scramble up what little they can and go buy another crappy car.

 

That's because most people share your mentality about credit. Why pay outright for things when you can borrow the money and pay more instead? Therefore, you need to keep borrowing money to show the banks that you're a good borrower, so you can keep borrowing in the future.

 

Contrast that with the person who drives a clunker and who has enough savings to buy a new (used) car when the clunker dies. No need to worry about what your credit score is when you have 7K on hand to buy the next vehicle.

 

Like I said, I am proactive...I have cash if needed and I can finance what I need to IF I need to. It's how I have set myself up in life and I am extremely comfortable financially.

 

To me, being "extremely comfortable financially" means not having to borrow money to begin with. Otherwise, you're not really financially comfortable, you're just the typical good borrower.

[avman]

The bank may be using your D&B score for your business and not your personal credit score. Those scores can be wildly different. Any chance your business credit isn't as good as you think?

[EssexMan]

In effect you're saying it's worth it to pay a surcharge to maintain "good credit".

 

You could look at it as the OP's interest payments being insurance premiums against the day he may need large amounts of credit - say, for a crisis, or an unmissable opportunity. I'm not arguing pro or con this, just suggesting it as a way of viewing the issue.

 

The question (to which I don't know the answer) would then be how the accumulated interest premiums over a given period compare to the credit lines opened up by a good repayment record.

[camus154]

But that's the myth of the debt culture--that you should focus on insuring your ability to borrow in the future instead of your ability to save and be truly financially independent today.

 

Such is the debt culture we live in. We're slaves to the machine in that regard. We think our financial health is measured by our credit score, which really does nothing but speak to how good of a borrower we are. And so our priorities are grossly out of whack. We think it's more important to make sure we can borrow money when there's something we really want to buy, rather than prioritizing what we do buy based on what we can actually afford.

[EssexMan]

But that's the myth of the debt culture.

 

I can't disagree - well, one of many myths!

 

Incidentally, I think there are some interesting cultural differences here. I'm guessing you're in North America. Here in the UK, credit ratings are far less important - I mean, they exist of course, but they're not "front-of-mind" factors in the way people assess their own financial health. What people are preoccupied with instead is property values, and equity in property.

 

OP, sorry for hijacking your thread slightly.