No credit-new buyer question

[n00bdude88]

Hey guys, I was wondering if I have a chance in hell of buying a versa with virtually no credit & not get raped on the interest.Here's the sitch-I'm 37. I make about $1,800 a month. I have a Mastercard debit card. I just don't,(never have)want(ed) to obligate myself to getting a credit card. I'm basically against the whole principle, I like paying for my things up front & be done with it. Although, I don't want to try & save 17k over the next year & 1/2 so I can pay for the car in one transaction. I'm guessing I'll need to get a buddy with credit to be a co-signer. MY biggest issue is that I know I could make the payments & be done with it in 2 years if I had a decent APR rate. It's not gonna happen though. Do my age & income & the fact that I've lived at the same place & worked at the same job work in my favor? Should I just go through the bank with a loan? Anybody else have a similar experience & got a versa?Thanks in advance. Have a great weekend!

[Martin Roy]

I'm still a student with very low revenues and got the dealer's usual interest rate, nothing higher. If you can prouve that you'll have enough money to pay each month, the company's finance services will obviously accept your demand. Of course, you'll have to name someone to back you up, but you shouldn,t have too much trouble. If... it works the same way in the States.

[n00bdude88]

Thanks Martin. That's a BIG if. Canada is a lot cooler about a lot of things then the U.S.-health care, cannbabis, etc.I just talked to my bro on the phone & he said if I go in there with $5k in ca$h,(no problem in a few months) they should be cool.

[BBISHOPPCM]

There are thousands of lenders out there for people with less than favorable credit. As long as you don't have any BAD credit (late payments, foreclosures, repossessions, bankruptcies, etc) than you should be fine. The fact that you have a credit card shows you have established credit, so that does work in your favor (as well as your age and employment history). I actually started building credit when I was still in high school by financing a 5-year-old Mazda 626. I used my parents as a co-signer and the lender definitely took me for a ride (8%).

You will get a better interest rate on a brand new car than you would on a used car, so keep that in mind. Be sure to ask the dealer what the "buy rate" is; this is what the bank actually approves you for, most dealers mark this up a few points to make a profit from you.

Good luck!!

[bikeman]

No credit is just as bad if not worse than bad credit. Other factors don't apply unless you're a long time member of a sympathetic credit union. Get a credit card and use it judiciously. There's no way around it unless you can do a massive down payment. Ya gotta have a credit history in this society. Sucks but that's the rules of the game.A debit card is not a credit card.

[scott@westcovinanissan]

There are a few things you could do: shop around find the best rate from a credit union (banks are ok too but they sometimes have higher rates), contact a dealer that has an internet or fleet department (if you are in the SoCal area contact Roberto @ west covina nissan), have some $$ for a down ( 5K is a good down for a 15-17k car), when/if you get a loan and you want to pay more $ per month make 2 payments one for the loan amount an another towards the principle of the loan (you'll have to make a note on that payment so the back/credit union knows) that will help you to pay the car of faster with less $$ of of pocket.

fyi no credit can be bad credit when buying a car, most banks would like to see that you are paying another bank,credit card, or loan (bank cards with visa,mastercard, etc. logos are not credit cards)

make sure that when you are going in to buy your Versa you bring with you pay stubs for a few months back, cell phone bills, utility bills (if any), and/or rent receipts. the banks like to know how much you make as well as how much you are spending each month.

good luck hope you get your V. If you would like to talk to Roberto from WCN e-mail me an I can get you in contact w/ him (good guy)

scottwcn

[n00bdude88]

Thanks a lot for the advice guys. I apppreciate it. i'm aware that the debit card & credit cards are completely different. I still won't be getting a crdit card just to earn good credit-I'm in the money saving phase right now, not spending. I'm not gonna go buy a bunch of crap on credit just to prove that I'm good at paying bills. I know it's a catch 22. Whadyagunnado?

[arco]

You're obviously very responsible with your money, so what's the harm in getting a credit card, charging a little each month and paying it off IN FULL each time you get your statement??

Yes, I realize it's admirable not having huge credit card balances. But life is really difficult without a good credit history. Why fight it?

[ace rothstein 81]

I had a zero credit score when buying mine, but my credit union financed me much better than Nissan would have.

[Ever Victorious]

What arco said is right. You don't need to carry a continuous balance on the card for it to count. Even if you just buy one book or CD on the card each month, and pay it off when the statement comes in, you are building positive credit.

Without that, you WILL need massive down payment or a cosigner to get a decent rate.

Trust me on this. I've gone from crappy credit w/ a repossession to a FICO score so high that mortgage brokers want to be my best friend.

Edit in response to Ace Rothstein:

Key word being "MY credit union". CUs will always offer their members better rates. If you're not a member of said CU, you don't have that guarantee. You can, however, bet with near certainty that ANY CU will have a better rate than a major bank.

[sswift]

I'm 32, and I also had only a debit card when I went into get my Versa.

I got mine for $15K. The dealership applied a few places for loans. I got turned down by Bank of America, and Citizen's, but Chase, which originally financed my Ford Focus with my dad as a cosigner, gave me a loan at 8.9% I think it was. I will probably refinance through my credit union soon cause they offer something like 4-5%.

After I got turned down by those other two places, I was eligible for a free credit report, so I checked mine, and found out that on the Focus, because my dad was the primary borrower, on the credit report, it said I was paying $0 per month on that loan. It said all the payments were on time, but it made it look like I wasn't the one paying for it.

I've been looking into how credit works lately, and it turns out your credit is good if you have a lot of credit but haven't used much of it. So after you get that Versa, apply for some credit cards. Look online for ones with a low APR and no annual fee. There are sites out there that compare them. Your credit score goes down a little when you apply for credit, but in the long run it will be better for your credit to have a number of credit cards you're not using, because of the crazy way they calculate your score. Just don't fall into the trap of using them, and they'll come in real handy when you want to buy better cars or get a house. :-)

[Martin Roy]

Wait, there's something I don't get... Is Nissan offering financing on the cars they sell in the US ? When I bought mine, I took advantage of Nissan's promotion which offered a 1% interest rate over 4 years. I also had a Student Reward Program which removed an additionnal 0,25% from the interest rate. So at 0,75% over 4 years, it's not bad. Anyway, isn't Nissan itself offering financing down south ?

[kc5f]

...I still won't be getting a crdit card just to earn good credit-I'm in the money saving phase right now, not spending....

But you are buying groceries and gas. Some cards, like the one I have, offer up to 5% rebates on groceries, gas and drug stores, and with no annual fees. Just pay it off each month, save good money and build up your credit rating to boot!

[ThirstyRoss]

Yeah, in Canada here I financed through Nissan Canada Finance, with an interest rate of 5% (better than i could get through my bank).

[Ever Victorious]

Wait, there's something I don't get... Is Nissan offering financing on the cars they sell in the US ? When I bought mine, I took advantage of Nissan's promotion which offered a 1% interest rate over 4 years. I also had a Student Reward Program which removed an additionnal 0,25% from the interest rate. So at 0,75% over 4 years, it's not bad. Anyway, isn't Nissan itself offering financing down south ?

Nissan is offering the same financing down here, but if you look at the T&C's of it, it is only for "well qualified buyers". So someone with no credit does not qualify.

[ms_stylin_versa]

I financed in Canada for 6 months @ 1% with 40% down.

[n00bdude88]

I'm not even buying gas these days. I ride my bicycle to work. It's about 2 miles from my house & I get there in about 15 mins. I guess buying food with a credit card would work though.

[Ever Victorious]

And I hope, since you are so close to work, that you continue to simply bike there, at least when the weather is good. Much cheaper, and better for you.

[motoguy128]

My wife is a loan officer at a bank. She'll be the first to tell you that having no credit or debt, although admirable, is financially unsound in the long term... especially if you ever want to own a home... or of course, secure credit. No credit is considered by the industry to be worse than poor credit.

Good employment history, no collections or late bills along with using a credit card for some of you every day purchases combined with a large down payment, should allow you to secure a descent rate.

[n00bdude88]

Thanks very much for all of the advice friends. I'll be sure to let ya know how the deal goes down when that day comes around.

[skwerl]

I do have a bit of credit (all good), but was still pretty young and only working full-time in the summer (making about $2700 Cdn/month). With no down payment I leased at 4% financing from Nissan Canada (leasing was just better for me personally). I had the option of putting down a $2000 security deposit (which I thought was too much, as did the finance manager) or get a cosigner. Soo I just got a cosigner.

I also second the idea of getting a credit card, even with just a small credit limit. That's how I got my credit with very little debt on there except for payments that automatically come out that I haven't paid yet. Ya know? Hopefully that makes sense.

[n00bdude88]

yeah, I get it now. It doesnt hurt to have a CC just as long as I don't go crazy with it. I usually buy online stuff with the debit card, so I never really thought I needed the real thing. I applied online for a couple last night & so far no luck. I'm gonna play the game though dammit!

[bikeman]

I'm gonna play the game though dammit!

Join a local credit union. Your financial life will usually be easier faster.

David

[benchthug]

bro you sound like you are just fishing around for answers that you wouldnt take action in for the next 5 years... here is a little 411 about my self... im 24 i have a very good credit score 780 to be exact... the reason im telling this is because a credit plays a big role in your life... having no credit will limit you for a low price for house and car and big purchases... just get a credit card start one and use that and save your money to pay off your credit card bill on the end of the month... if you are saying that you are responsible then get one... just know your limits... right now i have 10k available on my credit card... im planning on buying a house soon and im only 24 and i already have 2 cars... well one is still owned by the bank because i loaned 30k but i only used 19k :p no bragging but get a credit card and get a financial counseling to know how to use your credit card... raise your limits :P or youll be missing on alot of stuff...