Ask Terry Questions Retired, no debt, rejected for bank loan

Retired, no debt, rejected for bank loan

By Terry Savage on January 12, 2024 | Credit/Debt

Hello, my wife and I are both retired in our early 60’s. House is paid for. No debt for 15 years. If we want something we usually pay cash. We do use a discover card for the cash back and balance is paid off monthly.

Recently applied for a loan on an rv as they had better deal if we financed. The intention was to pay it off after a couple of months. We were rejected by 3 major banks due to “insufficient credit history”. Both of us have 830/845 rating.

Long story short one bank did give us the loan at 9.8 interest rate. We followed through but did pay it off when the first payment was due.

I was surprised and would like your input as to why we would have an issue getting a loan?

Thank you,

Jim

Terry Says

That’s not a surprise. Your history is a blank slate to their algorithms that determine credit-worthiness. Glad you got your deal, and then paid it off. It will help your finances, but not your credit history!
If you think you might need credit at some time inthe future, open another card account, use it frequently, and pay off in full every month. At least you’ll have SOME history –not a blank slate!

Recent Credit/Debt Questions

money

ASK TERRY

a personal
finance question