cancel
Showing results for 
Search instead for 
Did you mean: 

How to prepare for tractor loan

tag
Anonymous
Not applicable

How to prepare for tractor loan

First post here since deciding to take control of my credit.  I had a rough time with a long layoff in 2014 and although I kept the roof over my head and the kids fed I had a string of 22 consecutive 30 days late with Wells Fargo mortgage.  I used their hardship program and had a misunderstanding of how it worked and I'm left with 625-645 scores across the board.  I called them and had a conversation and they asked to send a letter to them begging for forgiveness.  That will be sent Monday.  Other than that my only form of credit is a furniture store card with 2600 on it.  I closed it in 2014 when I hit hard times thinking it was a good idea since it was at 6.5k at the time.  I own both my cars and still pay on the house.  I've actually been paying extra on the house since I'm employed again and things are working out.  I worked hard to get out of where I was and I'm considering a new tractor this fall since it seems that I have no new credit and my current tractor is 14 years old.  I have 0 inquiries in 2 years and I make a little over 100k so I don't it's a bad idea.  I would like to know how it's best to prepare for this.  I don't know if it classifies as an auto loan or some other sort of loan.  John Deere only calls it an installment loan.  Where should I be score wise to even try to apply for the loan?  What steps should I be doing now and what is Wells Fargo's history with goodwill letters?  Rumor is they usually pull TU which is currently 645 but has jumped 28 points in the last month since joining here.  

Message 1 of 10
9 REPLIES 9
bettercreditguy1
Established Contributor

Re: How to prepare for tractor loan

John  Deere may check your credit and you will see a hard pull on whichever bureau they pull. However, they do not report to any bureau if you qualify and are approved for a product loan. They primarily do this to verify whom you are and if you are somewhat responsible. 

Updated scores 3/7/21 TU 849, EQ 829, Ex 818 (all Fico scores) Remember the Three P's: Pay early in Full, Pay on Time, Patience
Message 2 of 10
Anonymous
Not applicable

Re: How to prepare for tractor loan

Interesting that they don't report to the credit bureau.  I would like to bring my scores up and the best way seemed to be financing.  I paid cash for my last one.  Unfortunately I really don't need or want anything other than a tractor.  

Message 3 of 10
bettercreditguy1
Established Contributor

Re: How to prepare for tractor loan

I asked an Agriculture Finance Manager out of curiosity. He replied, "If we reported our loans to farmers, they would never be able to purchase anything!" I thought for a flash and  smiled. A farmer with half a million dollars or more in equipment loans and you could see how dti would be blown up backwards. 

Updated scores 3/7/21 TU 849, EQ 829, Ex 818 (all Fico scores) Remember the Three P's: Pay early in Full, Pay on Time, Patience
Message 4 of 10
Anonymous
Not applicable

Re: How to prepare for tractor loan

I guess you have a good point with John Deere not reporting.  I'm just going to follow a lot of advice in the rebuilding forum and give it some time.  I would like to see a 750 or at least over 700 in a year or so.  

Message 5 of 10
Revelate
Moderator Emeritus

Re: How to prepare for tractor loan

What else is on your report currently?

 

Generally speaking you want 3 credit cards or more (darned close if not completely optimal at 3), and an open installment loan... you can always sort the installment loan though with a cheap secured installment loan if you don't have anything else from Alliant CU or similar, and bonus points for paying it nearly off and then letting it hang out at a small balance with the next payment years from now.

 

Computer algorithms, fun fun.

 

Method:
http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/Adding-an-installment-loan-the-Share-Secu...




        
Message 6 of 10
Anonymous
Not applicable

Re: How to prepare for tractor loan

I currently have 0 credit cards or installment loans, just a mortgage.  In my history spanning 17 years I have 5 installments loans all clean and paid in full.  Newest one has been paid 2 years ago.  I haven't owned a credit card in years but in the past I had 3 and got into trouble on one occasion.  It was paid off with a few late payments, closed by me and I never applied for credit again.  I talked with my local bank and they looked down their noses at me when I asked questions and stated where my scores were.  In the last 2 years I concentrated on paying off everything and put myself in a better position financially only to find out my credit score fell substantially.  It was 770 when I bought my home in 2006.

Message 7 of 10
Revelate
Moderator Emeritus

Re: How to prepare for tractor loan


@Anonymous wrote:

I currently have 0 credit cards or installment loans, just a mortgage.  In my history spanning 17 years I have 5 installments loans all clean and paid in full.  Newest one has been paid 2 years ago.  I haven't owned a credit card in years but in the past I had 3 and got into trouble on one occasion.  It was paid off with a few late payments, closed by me and I never applied for credit again.  I talked with my local bank and they looked down their noses at me when I asked questions and stated where my scores were.  In the last 2 years I concentrated on paying off everything and put myself in a better position financially only to find out my credit score fell substantially.  It was 770 when I bought my home in 2006.


Yeah, unfortunately with the newer models (FICO 8 and 9) not having any open credit cards is a pretty substantial penalty.  We don't have a lot of data on it but when we switched from EQ FICO 5 to EQ FICO 8 for Scorewatch back in 2014ish here, we had a number of FICO 5 ~685 installment only people get dropped to ~635 FICO 8.

 

Make small changes: I would definitely encourage you to pick up a singleton credit card, learn from the mistakes in the past, sort the tractor loan, and then pick up another 2ish when you feel comfortable unless you're in a position where you can pay cash for everything including houses and similar.  Cutting up one's cards wasn't as big of a penalty 10 years ago, but now and with more and more lenders adopting the newer models, it's a serious credit mistake to have zero credit cards open even if that disagrees with ~20 years of popular financial advice.

 

The mortgage if it's open still is perfect as far as installment loans go, you don't need to do anything there.




        
Message 8 of 10
Anonymous
Not applicable

Re: How to prepare for tractor loan

I am going to call discover and discuss things with them.  Even if I have to start as secured I don't mind lending them 1k to get a decent card.  From what I understand they are a good card and one you keep.  I was hoping the tractor purchase would help my credit and I can put down more than half.  It was a shame they don't report in my situation.

Message 9 of 10
Revelate
Moderator Emeritus

Re: How to prepare for tractor loan


@Anonymous wrote:

I am going to call discover and discuss things with them.  Even if I have to start as secured I don't mind lending them 1k to get a decent card.  From what I understand they are a good card and one you keep.  I was hoping the tractor purchase would help my credit and I can put down more than half.  It was a shame they don't report in my situation.


Discover is one of the best secured cards currently in my opinion, I think that's a stellar choice.




        
Message 10 of 10
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.