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The different credit score ranges in the RVs are going to be a little more difficult than your traditional house as there are no set standards as to how to determine each range. In fact, you will find that some dealers might even say they will finance anyone with a 640 credit score, and others might sell an RV to someone with a 620 credit score. So what should you consider when buying your first home on wheels? Here are a few points that I think need to be considered: Credit Rating Advice for RV Financing Bad Credit

First, think about the amount of money that you have saved for this purchase. It's great if you have been able to save $5-$10K, but I would not purchase a home on wheels if the only money you have is enough for a down payment.

Secondly, how much can you afford to pay each month? I know this sounds like it's two different questions, but they are really related to each other. Let's say that you can afford $500 per month; at this point, why would you consider anything over $20K in price. If you need to finance, remember that your payments will be based on your income and credit score (so ask yourself do I earn enough to cover my budget). Also, financing an RV is very similar to financing a car, meaning that there are stiff penalties for early payoff.

Thirdly, think about what kind of payments you can make when you are able to pay off all of your debt. I think it is great if you earn good money and have good credit, but if you cannot make the payments, then what will happen? You may find yourself back in the same boat or, worse, unable to afford both your house payment and an RV payment.

If at the end of all the thinking you decide that this home purchase is right for you, then here are a few suggestions that should help with getting approved for this new home on wheels:

Most lenders will use the term "Credit score" to describe their rating of your credit risk. Sounds easy enough, but there are actually many different ways they may measure how risky you are as a borrower.

Another lender might base his score on just the outstanding balance, with no consideration for past payment history or available credit. The third lender's score might consider only late payments in the past two years and ignore all other factors completely! All three methods can result in scores that fall within what we call the Fair Isaac Risk Score Range (the higher the score, the lower the risk). Since each lender may measure your credit risk differently, it is necessary to ask them what range you fall in before applying for a loan. There are generally three different ranges:

  1. Super Prime (740 - 850)
  2. Prime (660-739)
  3. Sub Prime (620-659)

You can see that even two people with relatively similar credit histories could have vastly different risk profiles based only on the lender's criteria. This is why it is important to understand not just your own credit scores but also how each score was computed.

So they provide their individual credit reports containing the information listed above to every potential lender who asks for it. The lender then computes his own score based on his own criteria, and that is the number he uses to tell you how risky of a borrower he thinks you are.

If you used this same procedure, it might be possible to determine what your score would be at each of the six reporting agencies, but not very likely since they don't share data either! If there were one agency whose scores were generated according to the same criteria as most lenders, however, then it might prove useful in determining your risk profile. The Fair Isaac Corporation has for years compiled data on consumer payment history and created their own credit scoring algorithms, which have proven more accurate than others. Therefore, many lenders use Fair Isaac's Risk Score Ranges instead of their own when evaluating credit quality. Over time we will refer our students to FICO scores frequently when using our products.

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