How long does it take to establish credit?
Miss JJ asked:
I am only 19 and I want to purchase a car. But every dealership I go to is trying to put me in a cheap car I dont want. They say my credit isnt established enough even though i have paid my bills on time! I have one card that Ive had for a year but my other 3, Ive only had about 9 months. So how long will it take for me to have established credit?
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I am only 19 and I want to purchase a car. But every dealership I go to is trying to put me in a cheap car I dont want. They say my credit isnt established enough even though i have paid my bills on time! I have one card that Ive had for a year but my other 3, Ive only had about 9 months. So how long will it take for me to have established credit?
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Tags: 9 Months, Cheap Car, How Long Does It Take To Establish Credit
September 14th, 2009 at 11:19 am
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Even if you have a credit card, it depends how much you charge on that card and how much your payment is every month. As long as you’re not late on your payment, you should be fine. Even if you have a credit card, if you don’t spend money with it, and you don’t pay your bills every month… or you spend so little you don’t even have a bill every month, it doesn’t help you establish your credit at all. I am 21 years old, and I have excellent credit. I have been charging my card under my name since I was sixteen. I am a full-time student, no house and no collateral, but I can take my credit and go buy a house in my city (newport beach) if I wanted to, and that is just because I use my credit card frequently and I pay at least the minimum every month.
September 16th, 2009 at 9:18 pm
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Hey Miss JJ,
First off, I want to acknowledge you for trying to figure out this whole credit thing! It can be confusing and this is so much information coming to you from various sources.
Just keep researching for yourself and don’t take anybody’s advice as gospel, use your intelligence and common sense as to what sounds right to you.
Ok, on to your question; Not all car dealerships are bad, just like not all lawyers are scummy….but there sure does seem to be a lot of jokes, comments, and stories to the contrary!
Without knowing your credit scores and what is contained in your credit report, I am going to make some general observations.
1. When you say that you pay all of your bills on time, which ones do you mean? Not all of your creditors report to the credit bureaus.
2. You mention cards, I am assuming that you mean credit cards. If that is the case, you should try and make sure that the balances are all below 30% of the credit limit. 5% is ideal for the FICO credit scoring model.
3. There is a hidden little secret that most car dealerships don’t want us to know. There is what is called an Auto Industry Score that is very similar to the FICO credit score, except it is obviously geared for the automotive market. Without letting the dealership pull your credit (inquiries bring your credit score down) ask the finance manager which score they use to determine credit worthiness. Since you have never had a car loan before, this is what could be hurting you.
4. Could you go to your bank or credit union and get a car loan? If your parents or other family members belong to any bank or credit union, maybe they could introduce you to someone at the bank. Notice I didn’t say co-sign.
5. Are you a student? If you are, they there are several programs that exist out there for you. If not, then just sign up for a class at one of the local community colleges and then you are an instant student.
Good luck to you
September 20th, 2009 at 3:02 am
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It can take a long time to establish credit, but keep in mind it only takes a very short time to ruin it. Be careful with those cards.
September 21st, 2009 at 9:41 pm
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It takes up to 2 years enjoy