Young People Orders

[nUcLeArEnVoY]

I am in a relatively similar boat. I am 21 except I am starting college soon, but I am entering a field where schooling isn't that expensive (paralegal - in my 30's I'll go for the full law degree), and I've already saved $13,000 towards the Camaro and plan to save double that by the end of '09 to put down. I have an average office job, but I shouldn't have any problem getting financing because of not only such a monumental down payment, but also I have been on less than two years and I am pretty sure I have a score over 710. But I know how you feel, occasionally people tell me not to blow my money on a car, but guess what, all those people who tell me drive lemming cars - they don't understand the passion you and I have. It's what we like. I wouldn't criticize my sister (who is my main antagonist for this kind of thing) for wanting to blow almost 1-2K a pop visiting New York all the damn time.

I am trying to save as much to have as loose a grip around my neck from car payments as I can. With 25K down, my insurance will probably end up costing more than my car payment. I don't want the financing to pass 48 months, that way I am likely to pay the car off before the warranty expires.

May I ask why you never entered the world of credit till now? Just not interested, didn't need to or...?

Remember dude, you can always get a loan. Especially if you get someone with good credit to co-sign. The dealer is there to TRY to sell you the car, they WANT to make that sale. Help them help you, as Tom Cruise would say. xD! Several months ago I made the mistake of telling a salesman at my local Dodge dealer while I was going over a Challenger that I had 10K saved towards the new Camaro and that rung his lightbulb, he worked HARD to try to sell me that car. My suggestion for now is to get 300 bucks and invest in a secured credit card, that's how I started out: 3 months in I started getting credit card offers in the mail and now I have four credit cards (3 unsecured), an $1,800 credit limit on my first one (started off at $300) and an American Express card. And if you cancel the account, they give you the $300 right back. Merrick Bank was the card I got, they're a good, trustworthy and reliable bank, I'd reccommend them. You might have to wait a little longer to get the Camaro so your credit can build, but that scenario in and of itself is nothing but advantageous. Not only will the Camaro develop and the bugs will be ironed out, but the hype will be over too along with the markups so you might get a better deal. If your credit does go up real fast, just remember, never be tempted to get credit cards left and right. The worse thing you can do is have too many. 4-5 is plenty.

And most of all, you'll have more time to save money to put down, which is extremely important to get the loan. The more money you put down, the more your odds of getting approved are. With how much I am putting down, they actually would be stupid NOT to approve me since if I default on payments, they take the car from me and sell it at its depreciated value which, combined with the huge amount down I gave them, makes them MORE money than if I bought the car whole!!!!


That's why they say patience is a virtue, and I am waiting till' the end of 09'.

You'll do great, man! Good luck.

[NVMY68SS]

Originally Posted by camaropete

You are wrong NVMY. Do some research.

Read the following:
http://www.myfico.com/CreditEducatio...YourSCore.aspx
http://articles.moneycentral.msn.com...eIn5steps.aspx

Carrying a balance has little or nothing to do with your credit score. Companies look at your overall ability to make payments responsibly as well as your debt to equity ratio. That's what really important. They don't generally even look at your current balance. They care more about the total credit limit that you have because that's how much you COULD owe if you wanted to charge it up to the max.

Blur, in the end, just be responsible with your money and don't over extend yourself.

I've done the research too.........I'm just going by what I have read from other sources and talking with financial advisors over the last 22 years.

I've only got an 810 out of 850, so what do I know.

[Inspector 17]

Blur, here is another article that I found that has some interested stuff in it. Specfically look at #5. That is an interesting one that I have never thought about. Your parents might be able to help you there.

http://www.creditinfocenter.com/cred...ur-score.shtml

Also, I found this note about the factors that make up your credit score. Not sure if this is current or not.

Your credit score is broken down into five categories:

Payment History – 35%
Total Amounts Owed – 30%
Length of Credit History – 15%
New Credit – 10%
Type of Credit in Use – 10%

[br9467]

Also keep in mind that if you get dinged for an extra % or two, paying an extra 50 to $100 a month will more than take care of 2 to 3 percentage points. FYI, sometimes the person who cosigns gets the credit for it on their report, not you, happened to me several years ago when my dad cosigned my first car. NEVER showed up on my report. Goold Luck. Good credit just takes time.

[card21doc]

Originally Posted by theshocker6969

so, just out of curiosity, my credit score was around 740-760 can't remember, about 6 months ago when i got approved for a mortgage... now since then, i've had a balance of 1000~2000 on my credit card, but have been paying off 500-1000 per month... so my balance hovers around 1000. now would my credit have gone up, or down? i always thought since i'm not paying in full each month it would work against me, but reading what others have said here, it's actually beneficial to me?

Probably went down right after the new mortgage, but should go back up a little each month as you prove you can handle the load.

If I misunderstood, and you didn't actually take the mortgage (or line of credit) it would only have gone down a little due to the "hard pull" of your bureau by the lender.

[card21doc]

Here's a little antecdote about the fallacy of cb scores:

Back in the mid 90's when US Bank made a hard run at the auto financing business, I had 2 customers buy cars a few weeks apart.

The 1st customer was a 20 year old with a 2 week job. He had been fortunate enough to open 2 credit cards 2 years earlier with a total limit of $1500. He took care of them, and had a score of 700. He made an income of 25000 annually. According to the guidelines established by the bank, I didn't even have to send in the application. He was automatically approved for 150% of the retail price of the truck. In other words, he could drive out of the dealership owing $30,000 on a $20,000 truck.

My other customer had worked at 1 job is whole life. He was in the bureau since the 1950's, and never had a late payment. (The credit bureau is only supposed to report on your last 10 years, but obviously s*** happens.) He only owed on his house, but had installment loans through out his history. He made in excess of $40,000 anually. For some reason, he only scored 685. He could still buy the car, but he could only finance 115% of retail. (Which was no problem in this case, because he was not upside down. However, his interest rate was slightly higer than the 20 year old's.

Let me ask you a question.

To who would you rather lend your money?

About a year later, US Bank got out of the auto market; it seems they had a high number of repos. They did get back in the market after a couple more years, probably wiser for their experience.

[The_Blur]

Originally Posted by camaropete

Blur, here is another article that I found that has some interested stuff in it. Specfically look at #5. That is an interesting one that I have never thought about. Your parents might be able to help you there.

http://www.creditinfocenter.com/cred...ur-score.shtml

Also, I found this note about the factors that make up your credit score. Not sure if this is current or not.

Your credit score is broken down into five categories:

Payment History – 35%
Total Amounts Owed – 30%
Length of Credit History – 15%
New Credit – 10%
Type of Credit in Use – 10%

This is a great site. Unfortunately, using my parents' credit in any way is not a viable option. They've made their share of mistakes. :( That's the reason that my primary business goal is to create financial security for my family.

Originally Posted by card21doc

Here's a little antecdote about the fallacy of cb scores:

Back in the mid 90's when US Bank made a hard run at the auto financing business, I had 2 customers buy cars a few weeks apart.

The 1st customer was a 20 year old with a 2 week job. He had been fortunate enough to open 2 credit cards 2 years earlier with a total limit of $1500. He took care of them, and had a score of 700. He made an income of 25000 annually. According to the guidelines established by the bank, I didn't even have to send in the application. He was automatically approved for 150% of the retail price of the truck. In other words, he could drive out of the dealership owing $30,000 on a $20,000 truck.

My other customer had worked at 1 job is whole life. He was in the bureau since the 1950's, and never had a late payment. (The credit bureau is only supposed to report on your last 10 years, but obviously s*** happens.) He only owed on his house, but had installment loans through out his history. He made in excess of $40,000 anually. For some reason, he only scored 685. He could still buy the car, but he could only finance 115% of retail. (Which was no problem in this case, because he was not upside down. However, his interest rate was slightly higer than the 20 year old's.

Let me ask you a question.

To who would you rather lend your money?

About a year later, US Bank got out of the auto market; it seems they had a high number of repos. They did get back in the market after a couple more years, probably wiser for their experience.

That's wild. I'd gather that US Bank had a strange formula for applying those credit scores. I wish that credit was taken with a grain of salt. I was always frustrated with being judged based on GPA which is based on test scores which are based on a teacher's ability to write a readable test. In other words, GPA is closely based on the ability of each individual teacher to write 100 questions per test that are concise enough to provide clear, accurate answers. If you're more concise than your teacher, then your grade suffers.

I feel that credit is the same way. Regardless of what my personal buying habits are, my credit is based on someone's report of my spending rather than my priorities and spending. I know that it is probably not a very good place for reform, but it's so frustrating to see people twice my age blow their money and mortgage their home and still pay lower interest rates than me because I'm young and buy things with the money I have in the bank.

[UCF w00t]

Originally Posted by NVMY68SS

I've done the research too.........I'm just going by what I have read from other sources and talking with financial advisors over the last 22 years.

I've only got an 810 out of 850, so what do I know.

And I'm 22, have always paid off the "statement ending balance" (still leaving a balance on the card) and have a score of 805. I think leaving a balance on the card might be a good idea but I don't understand why you would want to pay finance charges. From my experience, it doesn't help your credit score so you'd just be giving money away for no reason.

[Barry626]

Originally Posted by NVMY68SS

I've done the research too.........I'm just going by what I have read from other sources and talking with financial advisors over the last 22 years.

I've only got an 810 out of 850, so what do I know.

810 is same as 850.
in fact 750 is same as 850.
Excellent is 750-850 best u can get.
Makes zip difference if 810 or 850 still same!

Poor 350-619
Fair 620-659
Good 660-749
Excellent 750-850

Most people 9-10 fit in "Good" category.
Those that have less then 650 will have big problems getting credit.

Most people know their credit score & it's not the correct score.
Meaning: you need your "Fico" score not your credit score. Makes hugh difference!

[Barry626]

Originally Posted by littlecammi

Anyone who co-signs a loan for anyone but their own son or daughter is an absolute fool. And even parents should avoid co-signing for anything like a new car loan. You need to completely forget buying a Camaro for now.