Monday, December 12, 2011

What is the best way to build your credit score and history?

I'm 19 and am trying to buy a fairly inexpensive car ($4k or less), but I can not get a loan anywhere. The problem is not that I have bad credit, but that I don't have enough credit. I have a credit card with no late payments whatsoever and that account has been open for 16 months. How long before I begin to get somewhere? If I don't have enough credit for even a $1500 loan to fix our old car's transmission then I'm gonna be 80 before I even get a new car. It's not just a car for right...later on it might be my own home. Ugh!What is the best way to build your credit score and history?
This is how it works.....

Credit is based upon risk. Banks look at your credit card payment history when giving out car loans, and mortgage companies look at your car loan history when giving out home loans. I should change that...put more weight behind instead of ';look at.';

Although you have had a credit card open for 16 months without any late payments, you are only 19. Having worked for an auto finance company, they want to see a solid credit history of more than 16 months. Additionally, you have no assets, and that's something else they may look at.

Something to consider would be having a co-signer for the loan. Pay on the loan for 2 years and then either trade the car for another one in your own name, or refinance the car in your own name.

Someone else suggested getting a few more cards. That's not a bad idea either. I would suggest a major credit card and a department store card, and pay the balance in full each month. You have to be able to prove you can handle money, and 1 credit card may not be cutting it.

I'm 34 and just bought my 2nd car....WITHOUT a co-signer for the very first time. So this proves it'll happen before you're 89. :)What is the best way to build your credit score and history?
Just get some credit cards and like said by other, make some purchases without expending more than you have and always always pay on time.... After some time try applying for a car again, and keep paying always on time... Don't worry about the house... After 1.5 years or 2 years you will be able to get a loan from a sub-prime lender to buy your first house...

Try getting the college credit cards first, or the store credit cards like Target, Lowes, etc...
Go to a local credit union. To them, no credit is rarely the same thing as bad credit. They use common sense when issuing loans to their members. If you have a decent job, and can make payments, they should lend you money at very reasonable rates. Like half of what a dealership would charge.
Get credit cards, make a bunch of small payments (all on time, all eventually paid off) to as many different sources as possible.

You can't expect to have adult-level credit until you've had the buying power of an adult for some years. It takes time.

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