(Closed) Car loan with no credit history? Help

posted 6 years ago in Legal
Post # 3
Member
635 posts
Busy bee
  • Wedding: October 2012

Check with a local credit union. They’ll often have lower interest rates than dealers. 

Post # 4
Member
2009 posts
Buzzing bee
  • Wedding: November 1999

Yep.  I mean if you have no way to prove you’re a worthy borrower and you don’t have considerable cash..they aren’t going to loan easily.

I second the idea of credit union.  If that doesn’t work, you need to build up your down payment.

Post # 5
Member
13073 posts
Honey Beekeeper
  • Wedding: November 1999

First, get a credit card!  Start making small purchases on it and paying the bills.  You will slowly start building credit.  I don’t believe you can get a mortgage without credit, so definitely start trying to build up both of your scores now (both of your scores will be taken into account when determining the mortgage rate).

A 10% APR is pretty high, but they have to do it like that to ensure that their cushion their loss.  Your credit score is a measure of how well you pay your bills, and with no credit score, they can’t base their decision off of anything else.

Good luck!

Post # 6
Member
5295 posts
Bee Keeper
  • Wedding: January 1993

@abbie017:  I second this.

Get a credit card, treat it like cash. You’ll at least have something then within a few months and can hopefully get a lower APR then. And see if you can loan through a credit union. 

Post # 7
Member
213 posts
Helper bee
  • Wedding: October 2012

Get a credit card and pay it off every month. Check with your current bank to see what their rates are. 10% is mediocre but it may be the best you can get for now. Even with great credit, my new car was at 9%. I wanted a cash off incentive and had to sign up for the dealer’s financing for at least three months. Then switched over to my bank which gave me 2.75%. My bank also gave me discounts for having a checking account and direct deposit. I doubt you’ll be able to get a good mortgage rate with no credit history. Maybe when the time comes, look into first time buyer programs.

Post # 8
Member
5295 posts
Bee Keeper
  • Wedding: January 1993

oh yeah, didn’t see you were going after a house too. Honestly, if you can’t afford to put a down payment on a car right now, waiting a while on a house might be good. I get really nervous at people putting little to no down payment down (just assuming you don’t have much based on the car comment). So easy to fall behind and get in trouble that way!

Post # 9
Member
999 posts
Busy bee

Definitely check at a credit union or your bank. I work at a credit union and we do try to help people with no credit history. But what you are thinking about doing is also a good thing. We have a lot of people that come in to refinance after a couple months of going through the dealer or another financial institution. Only bad thing is that they will be able to see how many times your credit has been checked because a lot of times when you go to a dealership, they will run your credit through multiple companies.

Post # 11
Member
595 posts
Busy bee
  • Wedding: February 2015

I second the credit card advice, if you don’t build credit you won’t be able to get a loan for a house, down payment or not.

Post # 12
Member
82 posts
Worker bee
  • Wedding: May 2013

I definitely agree with looking around at banks and credit unions.  Perhaps an option may be someone to co-sign who has good credit.  Sometimes places will accept this if you and hubby have the income to back it up, just don’t have the existing credit.  Then perhaps in 6 months or whatever once you build up credit you can refinance in just your names and take the co-signer off.  Credit cards are definitely a good way to build credit though, even if it is in addition to a vehicle loan. 

When it comes to buying a home…look for 1st time home-buyers programs as well.  You will likely have to take classes where the teach you responsibility etc but they will also typically work with you.

Post # 13
Member
176 posts
Blushing bee
  • Wedding: April 2012

My Darling Husband had the same problem fresh out of college he never had a credit card and this was right when the market fell so loans were hard to come by in general.  I had him get a credit card and he used it for a couple months and then he applied to a bank (big one) and he got the loan at 3%.  If you can wait a couple months, I would suggest getting the CC and waiting a couple months then apply to banks on you own.  When we went to the dealer they quoted us some outrage interest rate as well but we already had approval so it wasn’t an issue.  It will save you some dough over the long run if you can get the interest rate down.  When Darling Husband bought his car he put 10% down.  Good luck.

Post # 14
Member
10366 posts
Sugar Beekeeper
  • Wedding: September 2010

@Mrs. Boa Constrictor:  You’re not going to get a home loan without credit scores, so i’d really put that goal on the back burner. Your husband’s short job history will also work against you there. Get the car, make payments on the car for a year or two, get a credit card, do the same. Build up a credit history. Save 20% down for the house. THen go house shopping. Being in a brand new city, right out of school is a recipe for buying the wrong house. Check out the area, get settled in life a little before you do the big house purchase.

Post # 15
Member
2419 posts
Buzzing bee
  • Wedding: August 2015

As a recent graduate as well, try going through Honda. I have not so great credit and I got an interest rate of 4.9% and I only put $600 down and traded in my other car.

Post # 16
Member
158 posts
Blushing bee
  • Wedding: July 2013

You definitely need a credit card! My parents made me and my sister apply for credit cards when we were 18 just so we could establish our credit at a young age. Don’t ever miss a payment! A line of credit is another good option to build up your credit rating.

If one of you has better/worse credit than the other a joint mortgage is hard to come by. And the interest rates on a mortgage will hurt waaay more than the interest rate on a car payment IMO.

Try General Motors for a car payment. They used to have a program where they made a couple payments for you if you were a student or recent grad. That would definitely help your savings department. Put those payments amount into savings.

 

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