I'm a recent college grad looking for a new car. I have just landed a $47,000 a year job but cannot get a $20,000 car because of past problems. I have poor credit because of late payments during college. What are my best steps to take? Can I dispute these late payments even if they are accurate in hopes that they may get removed from my credit record? What would you do?
Start by reading the INTRO threads at the top of the page, read them again, and come back to the forum and we will answer any specific questions you might have. There is whole lot to learn in the credit repair ballgame.
If you are fresh out of college and have a $47000 per year job, you are off to a good start. Good income and a degree. Way to go. It would be smart if you decided to buy a car that is a lot less expensive-- maybe a $10000 used car. It might not be what you want right now, but you would be much better off in the long run by financing a lower amount due to your lack of, or negative credit. Once you have paid off that car and proven yourself, you will be able to trade that in and get a more expensive car with a much better interest rate. No point in jumping in head first, as a lot of college grads have done, and lived to regret. Make the most of your first opportunity to make a wise financial decisions, and you will not regret it-- as someday you will have a big bank account to show for it, while everyone else is still buried in debt and mortgaged to the hilt. Good luck.
Pay cash for a decent used car. You shouldn't pay more than $10,000 cash. If you can't pay cash, you can't afford the car, period. Since you got thru 4 years of college, another $10,000 for a reliable used car wouldn't really break you too much. Make sure you are very assertive with the dealer & F&I manager, and threaten to walk out if they dare increase the price of the car when they find out that you will not finance thru them. Better yet, look in the newspaper, buy a used car from a third party & pay $100 for a full mechanical inspection. Dealers don't want to do business with people with credit problems because they can't qualify for much, if anything, and you will just end up paying more in interest.
{{{Can I dispute these late payments even if they are accurate in hopes that they may get removed from my credit record? What would you do?}}} Take responsibility & Pay on time. It really isn't that difficult to do, and with the average minimum payment of 2% or less just to keep good credit standing, it isn't really much.
Re: New grad w/ credit problems: He Of course you can. What would I do? I'd forget about wasting my time with the credit bureaus and work with the creditors to get them to see the benefits of removing them in the name of maintaining good customer relations. I'd point out that the Federal Reserve and several other regulatory agencies have specific provisions under which they can remove them legally and even give specific guidelines on how to do it, why they should do it and under what circumstances they should do it.
If you still have these accounts, and they have been in good standing for a while now, quite often the creditor will change their reporting for you. There is a good will letter floating around that works pretty well for this. You can put the NickL person on ignore. His answer to every question is the same, regardless, and now you've heard it. One day life will get hold of him and prehaps then, he will have something more to say, hehe.
I like all the advice given here. I agree that you should read the intro posts and get busy improving your credit reports that way. I agree that you should concentrate on not incurring any additional "baddies" if you can help it. I agree that you shouldn't be out there looking for a new car if you can help it and that $10k for a good car (just a few years old from a reliable dealer with a warrany) would be the way to go. All good! Get busy! Keep us posted! Doc
Re: Re: New grad w/ credit problems: He I wasn't aware the Federal Reserve had anything to do with credit reporting. Would you be so kind as to expand on this?
Re: Re: Re: New grad w/ credit prob I wasn't aware that that the Federal Reserve had anything to do with credit reporting either. In fact, if I were to hazard a guess, I would guess that they don't either. If they did then I would also hazard a guess that they would have made it a regulation instead of a suggestion.
Having a decent-paying job isn't enough for most car finance companies. My husband had a letter from his company stating that they were contributing $400 per month towards the monthly payment, but without good credit that did absolutely nothing (luckily, he had good credit). Remember - you could always get laid off or fired. Having a job doesn't mean that they will entrust the money to you, nor does it ensure that if you lose your job you will continue to make payments. So with very little job history and poor previous payment history, the finance company would be taking a huge risk on you (not saying this is the case, but this is the mindset). Also, credit doesn't clear up overnight. I'd work directly with the creditors you're having difficulty with, especially if you only have a few dings from a few years ago. If you need the car immediately or if they are more recent, buying a car in cash or having someone co-sign the loan might be the most immediate answer.
Buying the car in cash is the most logical & sensible option. Lenders look at previous employment history, usually you need to be at the same employer for at least 1 year to qualify for any type of car loan. It is stricter if you have credit problems. In todays economy, just because you landed a $47,000 a year job doesn't guarantee at all that you will be in the same position or making the same income 2 years or even one year from now.
Make sure you are very assertive with the dealer & F&I manager, and threaten to walk out if they dare increase the price of the car when they find out that you will not finance thru them. NickL ============ Better still you set the price - Don't let the dealer do it.
Been there, done that many times only to have the deal fall apart at the very last minute once they learned that I was a "cash paying customer" and wouldn't or couldn't finance thru them. I think what they hated the most was that I wasn't desperate enough for a car, & I didn't act grateful that they tried to get me some financing. Then again, I have seen too many people get scammed, and it happened to me back in 1998 when I bought my present car. Even though the car still runs very well, I learned my lesson the hard way. I have $20,000 cash allocated toward my next car BUT I will be damned if I will let any dealer or F&I manager scam me or waste my time. As I have said before & many real people would agree with: If you have negatives on your credit report or a FICO lower than 680, you should stay away from car dealerships unless you want to pay 10% over kelly blue book value for a 5 year old used car at a 14% interest rate for 6 years. With demand for cars far exeeding available supply, the customer has little, if any bargaining power over the listed price on the sticker, ESPECIALLY with less than perfect credit.
"With demand for cars far exeeding available supply, the customer has little, if any bargaining power over the listed price on the sticker, ESPECIALLY with less than perfect credit." What an absurd, absurd statement!
"With demand for cars far exeeding available supply, the customer has little, if any bargaining power over the listed price on the sticker, ESPECIALLY with less than perfect credit." Oh I see, that must be why the Ford dealer ran out of his office right after me, pleading for me to come back after I refused his price jack of some big $$$. PawMix
Absurb but absolutely true. I will repeat myself again: DO NOT buy a car from a dealer if you have past credit problems or a high debt to income ratio (even if you are current on all your payments). You are setting yourself up to be screwed royally, either by getting a loan at an interest rate in the high teens and/or paying thousands of dollars above MSRP or Kelly Blue book value for the vehicle. All of the good deals: Factory to dealer/customer incentives, paying at or below invoice, 0% or low rate (below 5%) financing are only available to those with high (680 or above FICO scores). If you are a cash paying customer, you will also be subject to the above and treated no better than someone with a 500 FICO who wants to buy a new car with nothing down. Anybody who says otherwise is truely naive.
Niclk- 1) It isn't due to a "high demand" for cars 2) A credit union can provide an excellent source of finacning even for people without great credit
