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Discussion Starter #1
As a few of you had heard I tried to buy a 2000 T/A with 30K on the clock. With an 800 Credit score I was all set to go except for one thing: my credit had no 'substance'.

Essentially I believe what they were telling me was that even though my credit was excellent on paper, there was nothing there to back it up. My question and that of probably a few younger people here on the site would be how do we as kids fresh out of school build our credit aside from say making payments on a credit card or student loan?

Also, how long does it usually take for someone to eventually impact their score through payments of loans and other financial gobbledegook?

I ask this because it stumped even my parents on why I was denied approval. Their and my solution was to begin paying my loans early (which I can I have the capital) to put some 'meat' on the 'bones' of my credit.

Good idea? Bad idea? Got some other ideas? I open this to anyone who also has a question about this both newbie and long time member. Because if we're going to be buying Camaros and whatnot.. I think it's a good thing to know and to keep confined to one thread for future refrence.

:thumbsup:
 

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i was in the same boat when i bought my camaro.

when i first ordered they said i had no problem with my credit and they approved me to put a deposit down on my car.

when i went to pick it up, they gave me the runaround saying eventhough my credit score and income are good, there just isn't enough credit history and the bank is going to need a co-signer.

so i asked my dad to co-sign with me, he had no problem cuz he knew i was able to make the payments. so he co-signs, the financial guy at the dealership goes and runs the numbers, comes back and says the bank is only approving you for this much, so you have to put more down.

i got pissed! i told him, you guys said it was no problem when i came in to order and you ran my credit, now all this :bs:! i told him he can take that extra money you want me to put down out of that little "market adjustment" you guys put on the car.

the manager got involved and he basically said he did not care if he sold it to me today or if i walked away, he wasn't moving the price cuz the car was fresh off the line and he could easily sell it by the end of the week to someone else. i think he preferred me to walk away so he could pocket my $2000 deposit!

i wasn't going to wait another 3-4 months for another one from a different dealership so i dipped into the modifications fund and took the car home that day with my middle finger high in the air :thefinger: at the stealership.

to this day i wish i woulda known about this site just 3 months earlier, i would have ordered from one of our dealership sponsors, probably Eric since he is closest location to me, and saved a few bucks at the same time.

:rantsw:

but back to your other questions, you might wanna try a different bank, some are more lenient than others. but with these financial times, it is probably easier just to get a co-signer.

student loans ruin your credit history, they f***'d mine up. they are reported to credit bureau's and defer the payments until you graduate, well that loan stays "maxed out" on your credit report until you start paying for it. and even if you start paying early, your first payments only pay 100% of the interest the loan has accrued since you got it. so eventhough your making payments, your loan amount has not budged until you pay off the accrued interest.

once you get one car loan payed off, student loans under control, and low to zero credit card balances on your credit history, i think the banks will be more gentle in the future. what they consider "new credit" doesn't go away until you have at least 7 years of good credit.

i've already paid off a lot of my loans in just under a year by paying double the minimum. sure i could use that extra $1000 each month and put it towards more performance stuff or wheels, but i'd rather pay the car and student loans off sooner rather than waste money paying more interest later.
 

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my goal in the future is to not take a loan out on a depreciable asset like vehicles. but that won't come for another decade or two for me!!! i use my debit card for everything, and unless it is an emergency i won't use my only credit card.

i just hope i don't get this problem when i mortgage my first house in a few years!
 

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If your parents will cosign, then that's the easy way to start. Otherwise, you've just got to use credit cards wisely. Build a history -- it takes some time, but we've all gone through it.
 

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If your parents will cosign, then that's the easy way to start. Otherwise, you've just got to use credit cards wisely. Build a history -- it takes some time, but we've all gone through it.


very true. I always make my payments a week early and dont use creditcards unless I have the money already.
What helped me was making a house payment that gave me tremendous credit.


If your parents or someone family wise can co-sign that would be Great for you.
 

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Discussion Starter #7
They cosigned for both my and my brothers student loans. They're strapped. I couldn't do it to them... and asking an aunt or uncle would seem.. douchey.

Also got the lowdown from the finance office: banks think student loans aren't credit and the car is too old.
 

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They cosigned for both my and my brothers student loans. They're strapped. I couldn't do it to them... and asking an aunt or uncle would seem.. douchey.

Also got the lowdown from the finance office: banks think student loans aren't credit and the car is too old.
ahh! yea once a car reaches a certain age, they won't give you financing for it.
 

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It's also good to know that if you have the money to pay for your car in full don't first get the loan and then pay it off the first month. not only will that boost your credit score you would have not really paid any intrest for it anyway.Had you wrote out a check at the dealership that would have never helped your credit score or help build your history.Banks love to see history of loans paid and closed.
 

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*Most* people need someone to cosign for them on their first auto loan.

The banks like to see a HISTORY of paying for something with a high credit limit before they'll loan you enough for a car. By HISTORY I mean a couple of years. If you had a credit card with a $5,000 limit, used it and paid if off every month, that still *in most cases* would not be enough.

High Credit Limit and a history of payments is what they like. Most often the only way to get that is to have someone cosign for you the first major purchase you make.

Hope this helps.
 

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*Most* people need someone to cosign for them on their first auto loan.

The banks like to see a HISTORY of paying for something with a high credit limit before they'll loan you enough for a car. By HISTORY I mean a couple of years. If you had a credit card with a $5,000 limit, used it and paid if off every month, that still *in most cases* would not be enough.

High Credit Limit and a history of payments is what they like. Most often the only way to get that is to have someone cosign for you the first major purchase you make.

Hope this helps.
anna has that bang on as far as how credit HISTORY works. the advice in a previous post about getting a loan for a car and then paying it off in the first month is going to do absolutely nothing for you as far as building a repayment history. zabo i would seriously talk to your parents again about the cosigning aspect. it may put a small hit on their credit report, but ultimately you are the one making the payments. on a small loan for an older car the payments shouldn't be so high that your parents don't qualify to cosign
 

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*Most* people need someone to cosign for them on their first auto loan.

The banks like to see a HISTORY of paying for something with a high credit limit before they'll loan you enough for a car. By HISTORY I mean a couple of years. If you had a credit card with a $5,000 limit, used it and paid if off every month, that still *in most cases* would not be enough.

High Credit Limit and a history of payments is what they like. Most often the only way to get that is to have someone cosign for you the first major purchase you make.

Hope this helps.
I had a credit card with a $12,500 limit for a couple of years...still wasn't enough. :lol:



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Yep, as many have already said...You have to have credit history. Sustained accounts in good standing over several years. Revolving credit such as credit card use that is not paid off every month will help bring your scores up. Don't want to pay the interest? Look for offers that allow purchases for no interest. Many retailers will offer credit cards and give you 18-24 months interest free if paid off in that time. Careful though, because the interest rate can skyrocket if the time elapses and money is still owed.

Income to debt ratio is another thing to look at. Having a certain amount of debt is actually better for your credit score, as long as the payments for the debt is being paid on time. Multiple accounts will help as well...i.e. multiple credit cards. Cancelling credit cards is not always good for your credit score.

Many banks offer online services where you can simulate adding credit cards and loans to your account. They will then calculate and estimate how your credit score will change. They can also highlight key things in your history which causes your score to be higher or lower. This is a good place to start.

Good luck! :)
 

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*Most* people need someone to cosign for them on their first auto loan.

The banks like to see a HISTORY of paying for something with a high credit limit before they'll loan you enough for a car. By HISTORY I mean a couple of years. If you had a credit card with a $5,000 limit, used it and paid if off every month, that still *in most cases* would not be enough.

High Credit Limit and a history of payments is what they like. Most often the only way to get that is to have someone cosign for you the first major purchase you make.

Hope this helps.
i'm glad to hear that, cuz in 3 years, when i'm ready to buy a house i plan on having the camaro, my wife's caddy (i'm sure she'll want a new one by then though :BangHead:) and my student loans paid off. which is a good $60k of debt paid off in 4 years time.
 

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Zabo, I am a mortgage loan officer and can tell you even I am buffutled by the credit reporting companies calculation of credit scores. On the mortgage side of credit analysis, some mortgage program underwriting guidelines require a minimum number of active trade lines. I imagine auto financing works the same way. The best thing to do is ask probing questions of the finance manager at the dealership, or better yet, go online and seek financing before you even enter into the dealership. That way, you already know the terms or the approval. (I.E., if you need a down payment or can finance 100%, etc)

The best way to build a high credit score is to simply use credit and pay on time. Pay on time. Pay on time. Did I mention pay on time? Young folks just starting out should have (and use) more than 1 credit card. Even if you have credit cards for emergency purposes and prefer to pay cash for things, reach into the wallet and use the credit card, and then pay it off each month. My first auto loan required me to put down 10%, which I did not have. Luckily, my dad lgave me the money for the down payment. People issuing credit (auto loans, mortgages, etc) base everything on risk. If someone has no credit history, then it is impossible to tell if they can handle credit. You can also ask the auto finance manager if it is possible to use "Non-traditional" credit trade lines such as auto insurance or utility bills. If you have other types of credit such as cell phones or auto insurance, you have established a type of credit history which would not necessarily appear on a traditional credit report. If you have made those payment always on time, then you may have a more positive "credit history". Bottom line is, if you are ever denied a loan or asked to produce a larger down payment, ask questions to find out why. But once again, just as in financing a home, it is best to get pre-approved before you walk into the dealership. If they can find and provided even better terms, then you really have a win-win. If there are any auto finance guys out there, I am sure we would love to hear about the best ways to finance a car and get the best loan terms.
 

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Discussion Starter #19
Well thanks for the advice guys but its come down to this.

I have no credit history as its been established.

However my parents paid for two years of mine and my brothers schooling by taking loans I'm their name. Why they did this was because I couldn't get a tuition loan at 18. So in cosigning they are in a similar boat. They'd get denied from having too much debt to the tune of 100k plus.

So in the end I guess I can't get a loan or this car end of discussion. Now I'm wondering if we can even get another lease after Dec.
 

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