so sad...had to cancel our membership

[dvc at last !]

subbing...

 

[Maistre Gracey]

It's low because she has several cards with huge lines of credit and no balances (she pays them off in full every month.) Sounds like a crappy formula to me.

Interesting... I just read on a two different credit score sites that this was a myth. They said a low debt to available credit ratio is a good factor in determining your score. They also said prime was about 10% of your available credit used. For me that comes out very close. The timing of paying my cards in full in relation to the snapshot of my credit works out to be just about that.

MG

 

[Maistre Gracey]

I get what is being said about having to put more down due to credit issues...but that is not really what the OP was about..it was the fact that they were not told that up front, thought everything was good to go with the deposit money they did have ready to put down. I can see where it would be very upsetting to find out differently.

I agree. When I read about all the research the OP did about DVC I assumed they stumbled upon the larger down payment, since it is mentioned fairly regularly.

MG

 

[marymoon]

There are people who do manual underwriting and give preferred rates to those with low scores because they mange money too well. Getting a good loan for a vehicle or house should not be a major issue for one who has assets and doesn't have bad credit but only a low score. However, anyone who has the net worth you described should be able to save up and pay cash for a car.

And she absolutely does pay cash for everything, including her most recent purchase of an investment home she bought last month. The cash was wired from her checking account to the sellers bank - no loans for her in well over 30 years. My late father was a shrewd investor and planner!

I was talking about purchasing insurance and they absolutely do base rates on FICO scores. She has yet to find one willing to give her a preferred rate even with her net worth and zero debt load because she has 4 credit cards with wide open, high limits. She's never come close to maxxing them out and really only has them to earn rewards but it doesn't matter to the insurance companies. To them, a score is a score.

 

[marymoon]

Interesting... I just read on a two different credit score sites that this was a myth. They said a low debt to available credit ratio is a good factor in determining your score. They also said prime was about 10% of your available credit used. For me that comes out very close. The timing of paying my cards in full in relation to the snapshot of my credit works out to be just about that.

MG

It might be mitigated by the fact that she has no source of income from means other than investments, too. Her card limits aren't unreasonable, around $100k, but because they're paid in full each month it looks like she has the capability to go on a serious spending spree. She only uses credit cards for the various rewards & cashback, anyway. Dave Ramsey thinks people like her don't exist IRT credit cards but they do!

 

[disneymom2one]

I've mentioned our story before. We bought into DVC several years ago, financing 150 points. It was absolutely the wrong thing to do and we actually gave back our membership. Fast forward a few years and we were able to improve our financial situation. I had been a SAHM and was able to go back to work. We also got a much better hold on our finances. I keep an open Excel spreadsheet and know to the penny how much we spend and what we spend it on.

So last fall, we bought a 50 point resale contract. We paid cash for it! It feels so much better this time around. DVC welcomed us back with open arms and we even got the same guide. No issues at all. You just have no idea how much it means to pay cash for something versus financing. 50 points isn't enough for a lot of vacations and we'll add on again (cash) soon but walking into Vero Beach a few weeks ago and knowing that that stay was completely paid for was just an amazing, amazing feeling.

My point is that (at least for us) paying cash has been a much, much, much better experience. It's what we should have done in the first place.

 

[crisi]

You must live in a city. For some, especially here in Texas it maybe that the closest grocery store is 20 or more miles away. A CAR is a necessity for those people. You just can't walk to the store or to your job for that matter. And in rural places like the country there is no public transportation or even taxis.

I was going to say the same thing. In SF or NYC a car is a luxury. In rural North Dakota, six miles from anywhere you could conceivably buy groceries, 30 miles from the nearest real grocery store or Walmart, 45 miles from the place you have your job, with windchills that go near 100 below making "ride your bike" not an option for about half the year - a car is a necessity or you don't have food.

 

[heathers4um]

yes...sorry - that was an oversight. I meant 3k...or 3000...not both but that would be a heck of an incentive for sure!

But the point is maybe they would be able to offer the same incentive trade off as I was offered.

FYI...$3000k = $3 million. You technically said $3000 X 1000.

I would take that over a cruise too!

 

[dcamdad]

And she absolutely does pay cash for everything, including her most recent purchase of an investment home she bought last month. The cash was wired from her checking account to the sellers bank - no loans for her in well over 30 years. My late father was a shrewd investor and planner!

I was talking about purchasing insurance and they absolutely do base rates on FICO scores. She has yet to find one willing to give her a preferred rate even with her net worth and zero debt load because she has 4 credit cards with wide open, high limits. She's never come close to maxxing them out and really only has them to earn rewards but it doesn't matter to the insurance companies. To them, a score is a score.

HAve you tried AARP for her insurance? My recently deceased FIL had the same problem. He had no where near the net wealth, however 2 years ago Allstate was going to raise his rates by $750.00 every six months due to his credit score. He had cc that he only used when traveling and would pay the balance every month. Long story short I shopped his auto insurance one night and got himm with AARP for $400.00 a year.

 

[Dean]

And she absolutely does pay cash for everything, including her most recent purchase of an investment home she bought last month. The cash was wired from her checking account to the sellers bank - no loans for her in well over 30 years. My late father was a shrewd investor and planner!

I was talking about purchasing insurance and they absolutely do base rates on FICO scores. She has yet to find one willing to give her a preferred rate even with her net worth and zero debt load because she has 4 credit cards with wide open, high limits. She's never come close to maxxing them out and really only has them to earn rewards but it doesn't matter to the insurance companies. To them, a score is a score.

I'm sure there are some insurance companies that do not base rates on FICO scores, she just needs to find them.

It might be mitigated by the fact that she has no source of income from means other than investments, too. Her card limits aren't unreasonable, around $100k, but because they're paid in full each month it looks like she has the capability to go on a serious spending spree. She only uses credit cards for the various rewards & cashback, anyway. Dave Ramsey thinks people like her don't exist IRT credit cards but they do!

That's a lot of potential debt that could affect their decisions with no ongoing income except investments. My understanding is that using CC and paying them off is good for a credit score though the CC companies may not be as thrilled.