Getting a car loan - no credit history

[shikimo 8]

That's the plan, I just didn't know if it was enough time to establish a credit history.

Two years is optimal (especially for a mortgage), but one stable year of regular, on-time payments is a very good start and certainly enough for a good car loan.

Even though the system sucks in many ways, it's fair in the sense that no credit is still better than bad credit: you start at zero and go up relatively quickly, rather than having to over-write and/or outlast negative information that can hang around for many years. IME other countries have their own (effective) ways of deciding creditworthiness: they're just not as mysterious and legendary as the American system. The score itself seems particularly arcane, especially since no one seems to know the exact equation and all four credit bureaus often have different numbers for the same person (when I got my car last month there was a 35-point spread between the highest and lowest reported scores, all based on the same information).

One more thing: don't forget to monitor your credit once you get it going! At the very least, an annual review of your credit statement (which is available for free) is a very good idea. It's way cooler to have that information before applying for credit than to be surprised about any fraud or oversights or other bad news later.

[SimonBelgium 49]

Given you're new in the US, DO NOT BUY THAT CAR WITHOUT CREDIT !

Seriously

Have a look at the sticky in this subforum about credit. (http://www.visajourney.com/forums/topic/496946-building-credit-score-tips-tricks/)

Best option would be to get a secured loan from your bank. Basically, say your car is 25,000$. Put (for example) 5,000 in a secured loan. Your interest rate will be very low (2% or so), but you have a new line of credit reporting into your credit report.

I know it is VERY counter-intuitive, but with no credit score, you really HAVE to work on it.

Another option is to go through the dealers that have the "credit for everyone" deals. You will need to provide payslips and such of course. The interest rate will be INSANE (like close to 30%). You can typically refinance after a few months.

With a credit car and a car payment, you should be around 700 within the year, if you pay everything off correctly.

Co-signing might be an option if you have someone with a good credit score, but typically this is only done between spouses, so for a lot of people reading this, it's not the best solution (especially if the spouse has bad credit )

Edited June 23, 2014 by SimonAndKimberly

[AmyWrites 593]

Anyone who's interested in updates, well, we went through a couple of banks, denied again, but our dealer (I co-signed) offer financing for 3.9% interest!! Much better than I expected. We also applied for a Target card so hopefully we can build credit.