First timer to loans (pay, deposit, credit report, accounts)

[Some Random AZ Bum]

I'm in the market for a used car. But I'm going to new it very soon and don't quite have the cash for the model I'm looking that's a clear title and in good shape. Oh and no budging on what I want, at all. So I thought about a loan, something minor at the very most $4,500. I make $11.50 a hr at 40+ hours a week. I figured I could pay one easily, the bills I have are pretty low since I'm being a bum livin' with my mom till college is over. Unfortunately I've applied for a car or personal loan and I can't get any of them! Reason being I have no credit (never gained any or lost any). I've worked at my current place for about 10 months now, I thought that would count for something.

Any ideas? I'm trying as it is to build my credit so this would be more easy, but I can't seem to get a chance (applied for a few credits cards etc etc). Still talking to a few family members but I'm not going to count on them to be co-signers (some can't, some wouldn't even though I helped them with little person loans before). And I certainly don't want to go to a loan shark! And no I will not become a drug dealer, although that does sound quite lucrative (seems everyone my age around here is a pothead).


I'm gonna go sleep on it, maybe I'll think of something then. If I forgot anything just say! I'll answer best as I can.

[Humanoid]

I don't know how you can get the money for your car, but there are credit cards that are made for people with little credit history. Have you tried applying for a card that is for students?

Also, each credit application that you file will lower your credit rating. So if your credit was neutral before it may be bad now Oh and have you actually checked your credit rating? There could be something on it that you don't know about.

[harry chickpea]

Credit takes a while to build. If you "don't quite have the cash," then it sounds like you have some cash. Gather that together, and hie thee down to your local banks and credit unions, cash in hand, walk in each door, and ask about setting up a checking and savings account. If the terms for those seem reasonable, then ask what the loan requirements will be when you want to finance a car in a couple of months. Be honest about not having a credit history. If you are stonewalled, take your money and move on to the next institution, and learn from each encounter.

Once you find a bank where the people will work with you, open those checking and savings accounts and be sure to never overdraw the checking. Keep the name of the person who you have dealt with, try to briefly meet the branch manager, and try to continue relating with your initial contact, even if it is just a passing greeting when you walk in to make your deposits.

After a couple months of regular depositing of your paycheck, and simultaneous regular small deposits to your savings, ask for the car loan, with the car as security, and your paying about 1/4th of the cost, up front, while still retaining the money in your savings account. The bank will look at your record, verify the blue book value of the car, and if the loan will be less than 80% of the blue book value, I'd guess that you stand a good chance of being approved. Be prepared to wince at the loan percentage rate, and ask if there are penalties for paying it off early.

During the same time as you are romancing the bank, examine credit card offers and apply for one that gives you a rebate on gasoline purchases. You'll need it. You'll also need to get quotes from insurance companies for auto insurance. It'll pay to shop around, so contact AT LEAST a half-dozen, and have your choice ready once you have the car. The bank will probably want to see that you have collision coverage.

[Some Random AZ Bum]

Thanks for the info so far. On the student card thing, good idea but can't quite apply for it yet. Just recently got off my lazy ass and about to go back to school. Couple months at most though I figure till I'm enrolled and could apply. What seems weird to me is I've applied for the lowest credit cards they have and yet they still deny me.

All the applications for loans and credits cards damaging someone's credit is a bit situational. I thought so too but from what I learned it seems if you apply for a certain amount of loans for the same thing in a certain time period (i.e. 5 car loans in a 1 month). No harm done!. I still got exactly no credit even with the applications, and they are reported on the credit report too!

About car loans, unfortunately the model I'm looking for is a 91-95 MR2. This particular car fails to meet the requirements as many banks only accept a car that's at most 5 years old. Found one that accepted 96 or 97....but the Japanese stopped shipping them here in 95! Also the value of a MR2 is very low KBB wise, banks I've talked to seem to have a minimum loan amount (usually the lowest I saw was $7,500 or so). I tried telling them the car has a bit of a cult following so the value can sometimes be double that of the KBB value for a excellent shape one. Some banks understood that (one financial guy even owns a 1st gen MR2!) but couldn't accept that, something about policy or some crap.

I'll try "romancing" (this one cracked me up!) the bank, it may be awhile but maybe I could even get a personal loan once I have a high credit rating. And I'll still continue to do so, seems like it'll help in the future for mortgages and that sort of thing right?

I wish I could afford to wait but my current car (a 92 MR2) is dying on me and it's just not financially smart of me to repair the car. It has frame damage and the engines got a blown head gasket, also leaks oil. Learned the hard way always get it inspected, if you can't don't say oh well and buy it anyways. Could sell the wheels I suppose for about $1,000-$1,200, luckily it's a very pricy and decent pair of wheels. Should sell well. But then I got no car to get around for awhile. Urgh.