Just went through a mess trying to finance a used car. I haven’t borrowed money since 2012, no debt, no credit cards, just living within my means. When I applied for a loan, I was told I was refused. Not because of bad credit, but because I hadn’t used credit recently enough.
The dealership advertises “no applications refused,” but apparently if you don’t have an active debt history, you’re too much of a mystery for the system.
Co-signer? Not allowed. Using my own bank account for payments? Denied. Their solution? Open a joint account with my dad just to satisfy a bank’s paperwork, pay hundreds in fees over 6 years just to make it work.
The credit system says you can’t borrow money unless you’ve already been borrowing money, like somehow living within your means disqualifies you. It’s not about good credit, it’s about loyalty to the debt game. Screw you for standing on your own feet, I guess.
Just needed to get that off my chest. Anyone else run into this nonsense?
No credit IS bad credit.
You don’t have to carry debt to have a credit history, but you do have to use credit to have a credit history. If you haven’t used the system, they have no knowledge of your crdit worthiness.
I use credit cards as a tool to protect my finances and purchases (fraud protection is greater with CCs than a bank account/card, as well as being able to dispute transactions where service was failed to be delivered or inadequate). I also always pay off my statement balance in full every month.
I do my best to only buy things I can afford to pay in full, but a home and automobile can be exceptions to that (even though I bought my auto in full due to a financial windfall). But I still participate in the system to gain the benefits of the system
www.nerdwallet.com is a great resource on credit education and provides a wealth of tools for starting build your bad credit to good credit.
This is a very American thing. If I needed to finance a car, I’d just need to show a couple of paychecks.
That’s not possible for people on fixed-term contracts unfortunately.
You can get a loan like this in the US as well, just not from a car dealership. If you have a checking account, that bank will very likely give you an auto loan.