He wants to buy a car ($2000 - 3000), his first. He is in Army Reserve for last year. Also works full time for Stater Brothers Markets in CA for about 6 months - promoted twice. He also has worked parttime for Youth Opportunity Center after school for about 3 years. Graduated last year. Has no credit. He asked me to ask all of you if you have had experience est. credit and then going about buying a car. He prefers to buy from dealer as financing may have to come from them. He is learing how to save money but "it's so hard." Any suggestions there would be helpful from you teen and 20+ people. Thanks.
2006-08-15 06:12:42 · 5 answers · asked by ALWAYS GOTTA KNOW 5 in Cars & Transportation ➔ Buying & Selling
DO NOT USE A CREDIT CARD TO BUILD CREDIT!!!!!!! I can not put this in caps big enough to yell it. It is a very bad idea. It has the exact opposite effect if you get in a bind and can't pay it
Here is the BEST way to build credit. Go to a bank and borrow 500 dollars for a short period such as a month and put it straight into a savings account. Do not spend a penny! A Bank will loan a small amount such as this to people with no credit. Pay the interest on it (it will be cheap) and when the note comes due. Pay the 500 out of your savings account. Do this over and over a few times, increasing the amount eventually, and your credit will get a nice boost.
He can tell the loan officer what he is trying to do and they will help him to build his credit and give good advice. Some of that advice will be to not use credit cards to build credit.
2006-08-15 06:30:04 · answer #1 · answered by crazytrain_23_78 4 · 0⤊ 0⤋
You don't always have to have a credit card to have credit. You just have to show you have the ability to pay your bills... a history of doing so is the best way to prove that.
If he has a full time job and can prove his income he can probably finance the car easily enough. He may need last years tax return. BTW, if he has ever lived on his own, then credit can be established by paying rent, paying electric bil, etc.
Any downpayment or trade in would certainly help the situation. If he has a co-signer available that would help him establish credit as well.
Good luck
2006-08-15 06:22:22 · answer #2 · answered by Sir Greggath 3 · 0⤊ 0⤋
Do not buy a car from a buy here pay here used car dealer. They will over price the car which amounts to extremely high built in interest.
The best thing to do is to save up at least 20 to 25% of the price of the car for a down payment. Then use the car as collateral and borrow the money from a reputable lending institution.
This will get you your car and establish credit.
2006-08-15 07:27:17 · answer #3 · answered by Adam 1 · 0⤊ 0⤋
Opening up a credit card account would help immensly. When I financed my first new car ($20K) all I had up to that point as far as credit history were credit card payments. They approved me without a problem.
Why take out a personal loan and pay interest on it when you can simply open a credit card account and charge small stuff and pay it off every month with no interest charges?????????
Some people are so dumb.....
Like I said, I got a loan for $20K car because of my perfect history of paying credit card payments on time. No way would I get a loan without this history.
Of course if you charge $5000 and miss payments and stuff, you'll get a negative credit... but you'd probably mismanage any type of loan.
2006-08-15 06:28:10 · answer #4 · answered by Anonymous · 0⤊ 0⤋
He may want to pay cash for the car but he does need to build up a credit rating. Tell him to get a credit card with a low interest rate and to charge his groceries once a month or gas once a month paying the card off at the end of each and every month. It'll help build his credit.
2006-08-15 06:18:41 · answer #5 · answered by Lex 7 · 0⤊ 0⤋
He should get a credit card asap (preferably from the credit union at Stater Bros), to establish a credit rating.
2006-08-15 06:18:49 · answer #6 · answered by Pseudo Obscure 6 · 0⤊ 0⤋
Does he have a credit card? Maybe he can use a credit card check Just watch out for that high interest rate . Better off just working until he can afford to pay cash
2006-08-15 06:18:56 · answer #7 · answered by jercha 4 · 0⤊ 0⤋