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Road Cycling “It is by riding a bicycle that you learn the contours of a country best, since you have to sweat up the hills and coast down them. Thus you remember them as they actually are, while in a motor car only a high hill impresses you, and you have no such accurate remembrance of country you have driven through as you gain by riding a bicycle.” -- Ernest Hemingway

New bike

Old 01-28-16, 02:07 PM
  #1  
Tri4life
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New bike

Def getting a new bike this spring. And it's about time... Here's the deal. I just got a new promotion at work (finally!!!) and now can afford a new carbon toy. I was thinking of financing. Not because I can't afford the bike, but because in the previous years of fresh out of college under employment being broke has done bad things to my credit, and I want to start to rebuild it. I already have a car... so no need there. I was just wondering how easy it is to get financing though Trek or Specialized (or anyone else for that matter). Any information is valuable. I just don't want to do more damage to an already damaged credit report I'm trying to rebuild before I apply.
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Old 01-28-16, 02:21 PM
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You should talk to your LBS about it. Much like car dealers, bike shops can get you on a credit plan for a bike. Also like car dealers, these are often handled by the bike company themselves, or a third party lender (of course in reality, the bike companies like Specialized are using third party lenders).

As for "how easy" it is: I guess that depends on your credit rating and how willing a the lenders would be. My guess would be "pretty easy" but you as usual will likely be charged a higher interest rate than someone with good credit.

As a way of building up a better credit scores, I can certainly think of worse ways.
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Old 01-28-16, 04:00 PM
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Yep, talk to your LBS. Repaying a loan like that on time should go a long way in improving your credit rating.
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Old 01-28-16, 04:48 PM
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My local Specialized dealer does financing and I've seen people do the exact thing you're thinking of doing. I say go for it, if the rate is way to high you can always walk away from the financing option.
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Old 01-28-16, 05:19 PM
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FWIW, if you're thinking of rebuilding your credit - sincerely rebuilding, and not just lip service - and you can "afford" that new bike, buy it with your credit card. Then when you get home, pay it all off online. You get the airmiles or whatever points program you are on. And rinse and repeat a dozen more times a month.

IMHO most people lack the discipline to properly leverage their credit, and it's just too tempting to have it all unravel and go into further debt.
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Old 01-28-16, 05:44 PM
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Originally Posted by mpath View Post
FWIW, if you're thinking of rebuilding your credit - sincerely rebuilding, and not just lip service - and you can "afford" that new bike, buy it with your credit card. Then when you get home, pay it all off online. You get the airmiles or whatever points program you are on. And rinse and repeat a dozen more times a month.

IMHO most people lack the discipline to properly leverage their credit, and it's just too tempting to have it all unravel and go into further debt.
Yea dude just get a credit card and do it that way. As long as you don't get a 0% APR and figure you can run it up to the sky because you don't have to pay it off for 12 months and then wonder in 1 year why you're $10,000 in credit card debt and can't pay it off.
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Old 01-28-16, 05:59 PM
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Originally Posted by Tri4life View Post
..... I was thinking of financing. ..... because in the previous years of ..... being broke has done bad things to my credit..
The old joke goes: Banks will gladly lend money to anyone who can prove they don't need a loan. The sad fact is... that isn't a joke. Nothing restores the problems associated with being broke.... more than a BIG pile of money. Buying toys, and taking out loans, will NOT enlarge your money pile (or improve your credit rating).

Originally Posted by Tri4life View Post
I just don't want to do more damage to an already damaged credit report I'm trying to rebuild
Then put every penny of that new raise into a saving account. And use the old income wisely enough to pay everything on time... and of course pay off any debt. Stop thinking about spending.... and figure out how to keep (save) what you earn.
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Old 01-28-16, 05:59 PM
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Originally Posted by exime View Post
Yea dude just get a credit card and do it that way. As long as you don't get a 0% APR and figure you can run it up to the sky because you don't have to pay it off for 12 months and then wonder in 1 year why you're $10,000 in credit card debt and can't pay it off.
I know exactly what that feels like. Did that to myself years ago and it took forever to get that thing paid off. Hope the OP takes your advice.
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Old 01-28-16, 05:59 PM
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Originally Posted by seymour1910 View Post
My local Specialized dealer does financing and I've seen people do the exact thing you're thinking of doing. I say go for it, if the rate is way to high you can always walk away from the financing option.
This is the route to go. Maybe even have your CC bill automatically deduct out of your bank account if possible is a good way to keep up credit, I do it here in Japan, but not sure about state side.
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Old 01-28-16, 06:14 PM
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Originally Posted by mpath View Post
FWIW, if you're thinking of rebuilding your credit - sincerely rebuilding, and not just lip service - and you can "afford" that new bike, buy it with your credit card. Then when you get home, pay it all off online. You get the airmiles or whatever points program you are on. And rinse and repeat a dozen more times a month.

IMHO most people lack the discipline to properly leverage their credit, and it's just too tempting to have it all unravel and go into further debt.
I actually haven't had a credit card in a number of years. Where in lies the problem. To get credit I need to have more credit... Which is what I've been told by creditors. Right now my car may be decent and working. But if I ever want to buy a new one I have to establish credit extensions and repayment. I figure I'm spending the money anyway, might as well make it work for me.
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Old 01-28-16, 06:15 PM
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Originally Posted by Dave Cutter View Post
The old joke goes: Banks will gladly lend money to anyone who can prove they don't need a loan. The sad fact is... that isn't a joke. Nothing restores the problems associated with being broke.... more than a BIG pile of money. Buying toys, and taking out loans, will NOT enlarge your money pile (or improve your credit rating).



Then put every penny of that new raise into a saving account. And use the old income wisely enough to pay everything on time... and of course pay off any debt. Stop thinking about spending.... and figure out how to keep (save) what you earn.
Taking out loans and effectively paying them back on time will absolutely help repair one's credit rating. Putting money in the bank and sitting on it doesn't fix your credit. Lenders want to see a track record of payments. Whether the OP should do it or not is another matter altogether but if he's trying to fix his credit it's going to help.
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Old 01-28-16, 06:24 PM
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You'll do more damage to your FICO if you apply for a loan and not get it. Credit inquiries are bad. I would imagine a bicycle shop would require very good credit. See if you can join a credit union and get a loan through them. And go join creditboards.com.
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Old 01-28-16, 06:37 PM
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Originally Posted by Lazyass View Post
I would imagine a bicycle shop would require very good credit.
Bike shops font finance themselves. They use commercial lending sources - same ones that furniture and appliance stores use. They are pretty easy to get
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Old 01-28-16, 06:39 PM
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Originally Posted by Dave Cutter View Post
The old joke goes: Banks will gladly lend money to anyone who can prove they don't need a loan. The sad fact is... that isn't a joke. Nothing restores the problems associated with being broke.... more than a BIG pile of money. Buying toys, and taking out loans, will NOT enlarge your money pile (or improve your credit rating).

Then put every penny of that new raise into a saving account. And use the old income wisely enough to pay everything on time... and of course pay off any debt. Stop thinking about spending.... and figure out how to keep (save) what you earn.
This is wrong if you want to improve credit ratings.

Originally Posted by dmcdam View Post
Taking out loans and effectively paying them back on time will absolutely help repair one's credit rating. Putting money in the bank and sitting on it doesn't fix your credit. Lenders want to see a track record of payments. Whether the OP should do it or not is another matter altogether but if he's trying to fix his credit it's going to help.
This is right.
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Old 01-28-16, 06:42 PM
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Originally Posted by dmcdam View Post
Taking out loans and effectively paying them back on time will absolutely help repair one's credit rating. Putting money in the bank and sitting on it doesn't fix your credit.
You are completely mistaken. That is NOT how credit reports are compiled. True... everyone MUST pay debts on time, every time. But adding new debts to a history of bad debts will NOT improve a credit score. "Setting on" money.... AKA: having unused resources... DOES improve credit scores.

Originally Posted by dmcdam View Post
Lenders want to see a track record of payments........ if he's trying to fix his credit it's going to help.
Yeah.... if the OP is a time traveler and is looking for a 1950's credit rating... you might be right. If the OP wants a credit score of any merit in THIS century he needs to exploit his known ability to pay. Which means... he needs a big pile of money.

But with that said/posted. What good would a "improved score" accomplish? Numbers are just numbers! What the OP (and everyone else) needs is wealth! No one borrows or spends themselves wealthy. Particularly spending on toys.

Last edited by Dave Cutter; 01-28-16 at 07:02 PM.
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Old 01-28-16, 06:58 PM
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Originally Posted by Dave Cutter View Post
You are completely mistaken. That is NOT how credit reports are compiled. True... everyone MUST pay debts on time, every time. But adding new debts to a history of bad debts will NOT improve a credit score. "Setting on" money.... AKA: having unused resources... DOES improve credit scores.



Yeah.... if the OP is a time traveler and is looking for a 1950's credit rating... you might be right. If the OP wants a credit score of any merit in THIS century he needs to exploit his known ability to pay. Which means... he needs a big pile of money.
Everything I've read about how your credit score is compiled and not one mention of how much cash you have on hand. Unused credit yes, but nothing about bank balances.

  • Payment history - 35%
  • Amounts owed - 30%
  • Length of credit history - 15%
  • New credit - 10%
  • Types of credit used - 10%
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Old 01-28-16, 07:02 PM
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If you don't have a credit card yet, getting the credit for the purchase is a good start. Establish a history of paying on that, and also get a secured credit card from your bank and keep that in good standing. Then it's much easier to obtain credit.
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Old 01-28-16, 07:13 PM
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Originally Posted by dmcdam View Post
Everything I've read about how your credit score is compiled and not one mention of how much cash you have on hand. Unused credit yes, but nothing about bank balances.

  • Payment history - 35%
  • Amounts owed - 30%
  • Length of credit history - 15%
  • New credit - 10%
  • Types of credit used - 10%
I don't see income in your computation in there either! So apparently having an income (JOB) wouldn't matter to a bank either huh?!?!?!?

Trust me... you win the lottery tonight... next week your credit score is over 800. And the reason why? Well think about it. Banks DO know exactly how much you earn AND how much you save/have. And having more money than you spend or need equates to a high credit score.
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Old 01-28-16, 07:13 PM
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Originally Posted by Dave Cutter View Post


But with that said/posted. What good would a "improved score" accomplish? Numbers are just numbers! What the OP (and everyone else) needs is wealth! No one borrows or spends themselves wealthy. Particularly spending on toys.
When did the OP mention he wanted to accumulate wealth? He asked about getting a new bike and mentioned wanting to repair his credit score. That's what all these replies are about. Your credit score is one of the most important numbers in your life. Wealth without a good credit score won't help you buy a house unless you're looking to pay cash for it.
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Old 01-28-16, 07:17 PM
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Originally Posted by Dave Cutter View Post
I don't see income in your computation in there either! So apparently having an income (JOB) wouldn't matter to a bank either huh?!?!?!?

Trust me... you win the lottery tonight... next week your credit score is over 800. And the reason why? Well think about it. Banks DO know exactly how much you earn AND how much you save/have. And having more money than you spend or need equates to a high credit score.
Not my computation - it's published information from the credit reporting agencies. Of course they want to see your verified income but it's way more than just how much cash you have in your bank account. You might have $100k in the bank but you might owe $200k.
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Old 01-28-16, 07:21 PM
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Originally Posted by Dave Cutter View Post
I don't see income in your computation in there either! So apparently having an income (JOB) wouldn't matter to a bank either huh?!?!?!?
There are two parts here. One is qualifying for a loan and that's where sufficient income and equity matters. The other is credit history and that's what the score reflects. Both are needed.
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Old 01-28-16, 07:26 PM
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Originally Posted by dmcdam View Post
Not my computation - it's published information
Yes... we all know. What you posted (as if it was knowledge) was just a copy/paste you found on-line. And of course... it is more-or-less bogus.

Originally Posted by dmcdam View Post
........ Of course they want to see your verified income but it's way more than just how much cash you have in your bank account. You might have $100k in the bank but you might owe $200k.
Yes there was an earlier post here that explained that:

Originally Posted by Dave Cutter View Post
...... he needs to exploit his known ability to pay. Which means... he needs a big pile of money.
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Old 01-28-16, 07:39 PM
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Originally Posted by StanSeven View Post
There are two parts here. One is qualifying for a loan and that's where sufficient income and equity matters. The other is credit history and that's what the score reflects. Both are needed.
Yes.... if we were having this discussion back in say 1980... you'd be correct. However.... my time-line is stuck in a liner progression. I'll bet the OP is stuck in 2016, for now, also.

Back in the late 90's (I was working in banking then) we switched to a different calculation as a means/method to predict defaults (mostly due to bankruptcy's). The data/ideas you're basing your decisions on... is outdated.

The current rating system attempts to predict the customers ability to handle life's events and emergency's. IE does the customer have enough available resources/credit/cash to cover a medical expense/car repair/job loss/DUI......

Last edited by Dave Cutter; 01-28-16 at 07:54 PM.
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Old 01-28-16, 07:50 PM
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Originally Posted by Dave Cutter View Post
But adding new debts to a history of bad debts will NOT improve a credit score.
It depends on what type and how many bad accounts he currently has, which you don't know. And paying off bad accounts as you suggested isn't always a wise thing to do. From a moral standpoint, yes, but not from a FICO standpoint. If someone owed $1000 on a credit card and they haven't paid on it for two years, then they can wait 5 years for it to fall off, or pay it off which starts the 7 year countdown back up. And it won't raise his score in between. If you want to pay it off and have it immediately removed from your credit history you need to first mail a pay for delete letter to the company. If they don't agree then you don't freaking pay it. If the OP followed your advise, he would just keep money in a savings account, pay old debts and wait out 7 years for his scores to go up.

I went from having a FICO in the mid 500's to getting a mortgage for a brand new house and new truck 6 months later in the middle of the credit crunch in '09. Not 1980.
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Old 01-28-16, 08:03 PM
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Originally Posted by dmcdam View Post
When did the OP mention he wanted to accumulate wealth?.............. Wealth without a good credit score won't help you buy a house unless you're looking to pay cash for it.
You are missing the point! There was a time in America when wealth and credit was separate and apart. Those were good times! But they are gone.
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