How do I earn a "good" credit history if no one will give me any credit?

Question

In a recent attempted car purchase, I have been denied by SEVERAL loan depts. I don't have much positive credit history. No "real" history at all. The debts that I had, I paid off, late cause I made those mistakes at a different time in my life. Here's the thing, now the only thing on my credit report is a repo that was paid off Years ago and my 12,000 student loan which is paid each month electronically (to get the discount rate, of course). I feel like I'm in BIG trouble, but now that I have a job that I can afford to pay people back. This situation is really bad. Oh, yeah, I forgot to mention that because of my job, I have moved around quite a bit. This probably doesn't look good either. Even the bank said no, so how do I fix this when no one seems to want to give me a chance? I have looked at my credit report (so many times I dropped my score 12 points) trying to get things off that were paid years prior. I don't know what to do. HHHHEEEEELLLLPPPPP!!!!

Answer 1

You need to continue paying your debits.  

Now is not the time to get more credit.   6 months of good payment history, and a down payment of 15% should allow you to buy whatever you want.  Creditor do not care about bad history.  They care that you have a track record of paying your debits.  I would not go out an open up a bunch of new lines of credit.  This is just as bad as having no credit.  Pay what you owe first.

Remember - you have the negative marks not the bank.  If you want to play their game you have to pay by thier rules.

I believe if you cannot pay for it in cash you do not need it.

Why become a slave to a Bank for a Car?

Answer 2

Get a secured card from Orchard Bank and/or Capital One...don't max out your card...keep it under 30% usage...pay in full...pay on time...there brand new established credit.

Answer 3

Start by assuming it will take some time to get your credit back to where it needs to be.

First, you are correct that lenders tend to be a little shy about lending money to someone who moves around frequently.  Lenders tend to like a residence history of at least a year at one address.  If this is not going to be possible, check with your employer and see if you have access to a credit union through them.  That should make things easier since they will understand the nature of the job.

Next, obviously, try to limit your credit report requests.  Reports don't change that frequently that you need one very often.

If you have a bit of cash (say $500) that you can spare temporarily, open up a secured credit card.  That means that you put $500 in a bank account that you can't touch and the bank provides you with a credit card with a $500 limit (if you don't pay, they take the cash from the account - the security).  Use the card and pay it off monthly.  After 6 to 9 months, go to the bank about increasing your limit and removing the security.  Use and pay the account off in 30 days for the next 6 to 9 months.  Now you have established a credit history at that bank and they will be more willing to grant you a loan.  Try this at a local/regional bank - they tend to be more customer friendly.

Also, after 6 - 9 months, seek out a local department store with credit cards of their own (something like a small chain will work too - Peebles, Belk).  Apply for a card there and do the same - use it a few times and pay it off - do not miss a payment even by a day.

Rebuilding credit can be a slow process, but it can be done.

Answer 4

Credit repair does not happen over night.

Scores are based on the last 24 months of activity!

The more you pay on time, the better.

Just keep your chin up.  Life has its ups and downs.  You went through the downs, now it's time to go up!

As you work on it, you will feel much better about yourself.  It's a great goal to acheive.

Checking your own reports will NOT do anything to your scores.  So, what ever caused it to drop was not that.

If yo are paying on the school loan on time, this is only going to help you gain good credit history.  Just keep it up.

May I recommend the best free message board for credit help?

Post away, ask questions. There are a lot of folks who have been through, are going through what you are.

Good luck

http://www.creditboards.com/forums

Answer 5

You should use credit repair agency to fix your credit - for example this one - http://freecreditreport.sinfree.net - They can clean lots of bad stuff from your credit report - and do it much faster than yourself, so your credit will go up fast.

After credit repair you can get the loan with minimal interest rate.