Almost impossible to get these days.

[BuzzKillington]

Credit.

I'm 21 and my only line of credit I've ever had was an auto-loan back in late 2007. The interest rate was 26%! I believe, it's the highest they can legally charge. I've been on time every month and I thought it had been building my credit but the bank told me they only look at Experian... but this finance company is only reporting to Trans Union.

Because of this, I have no credit history and was DENIED for a 300 dollar secured credit card... basically, it's not even a credit card... they lock the funds in your account so you're basically borrowing against your own money and since the card limit + 20% is locked in your account, there's no way for the card to go unpaid. This type of card is FOR young adults trying to get credit... yet they denied me?

They told me I could take out a savings secured loan and stretch the payments out about a year. They claimed they wanted me to do this before they could give me a secured credit card... -.- Without credit I can't move out unless I can convince one of my parents to cosign.

This is ridiculous.

[diluzio91]

im 19, and i work ~ 20 hours a week (full time college student), and i got denied for a "student" credit card. i pay the interest on my student loans and have never missed a payment in 2 years.. I feel your pain.

[x88x]

The only credit I have at the moment is from my student loans, but since I've always paid them on time I have an absurdly high credit score. On the one hand, this is good, because if a company doesn't care about the quantity (like the rental agencies I dealt with last year looking for an apartment), I look awesome...but if a company does care about quantity, it looks bad.. I ran into that when I tried to get approved for a mortgage with my credit union.. They turned me down for their program specifically designed for first-time homebuyers...because I didn't have enough credit.. -_^ Rather like you two, I'm confused..wouldn't you expect someone trying to use these programs to not have much credit?

Personally though, I don't mind that I don't have much credit. I have promised myself that the only time I'll ever borrow money is for education and a house. I'm done borrowing for education, and I just finished borrowing for my house, so I'm done until I move again...which I don't plan on doing for at least around 10 years.

Buzz, have you considered looking for someone renting a basement/over garage/etc apartment or someone looking for a roomate? If you're dealing with a person instead of a company you might be able to convince them to accept you even though you don't have much credit. Also, from my experience, renting from a corporation just sucks in general anyway.

[Oneslowz28]

I have been watching a lot of Dave Ramsey's videos lately. You guys looking to start your financial life should take a look too. He makes more sense than any professor, investor, or "professional" financial consultant I have ever talked to. If I would have had his videos at your age, I could be looking to retire in 13-15 years from now.

http://www.daveramsey.com/home/

[x88x]

He makes good sense. Doesn't say anything about how to achieve that goal of being debt free in the demo video, but I suppose that's how he makes money, eh? ;) This is why I don't have a credit card and I buy older, used cars (well, car..my first is still working just fine, thanks). For the cars, not only do they cost less up front, they're also cheaper to maintain, and often get better mileage than new cars because they don't have to lug around all that extra weight from extra safety equipment.

[SXRguyinMA]

actually newer cars get better mileage due to enhancements in engine and fuel systems. compression ratios changed, valve sizes changed, intake and exhausts changed, fuel injector spray patterns changed. it all adds up to better performance with better mileage and fewer emissions

Just to think. my 99 silverado with a 5.3L v8 makes ~300HP and gets ~15mpg hwy. the newer v6's in some of the cars nowadays are making well over 400hp and getting double the hwy mileage!

[Oneslowz28]

Yes but a brand new car is worth 30% less the second you sign your name to the loan papers.

[x88x]

My 1996 Mazda Protege (4-door sedan) gets about 40mpg with a mix of probably about 80% highway, 20% city. And let's just say I don't drive sedately. ;) For context, the 2010 Mazda 3 (the line that replaced the Protege) only gets 33mpg highway (25mpg city! :eek: ). My mom's 1994 Toyota Corolla also gets about 40mpg highway, and my sister's old 1991 Toyota Corolla Station Wagon gets in the upper 30's (used to get about 40, but...well..it doesn't any more).

Fuel economy per HP may have improved, and engines may have gotten more efficient, but I find it absurd that the average fuel efficiency for passenger cars in the US (http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html) hasn't changed significantly in the last 20 years.

On another note, my 1980 Honda CM400T motorcycle gets about 55mpg with that 80/20 driving mix...and I drive that even less sedately than I do my car. :twisted: Modern BMWs bike don't do much better than that. And forget Harleys...I think the Sportster (their smallest bike) barely beats it on highway...most Harleys get in the 30's. ..though, let's be honest, you don't get a Harley to save on fuel. :D

[d_stilgar]

I don't see why any of you would want a credit card any way. It's a total rip off. I hate hate hate going into debt. Let's see my history . . .

Student loans:
These are all 100% interest deferred. My wife works and we almost have her student loans paid off. We'll get mine paid off before I ever graduate. The big thing here though that would affect my credit score is that I've never made a payment.

Renting:
Renting is not a loan, but it does build your credit. A good renting history will help a lot with your credit score. Renting sucks though because you will never see the money out of it. What adversely affects my score here is that I've moved 3 times in the past year and having lots of addresses is bad for your score because people want to know where you will be in order to come collecting if you don't pay.

Other than that I have had no credit history. I've never had a credit card and I don't ever want to have one. Seriously, never.

Now lets see what happened when I went to get a loan for my mobile home. My equifax credit score was 708. It's nothing to shout about, but this is from paying my rent on time and not having any amount debt other than student loans. Guess what, I was approved for a simple interest loan at 6% for $13,000 on my $17,000 mobile home. Having the $5,000 down payment helped for sure, and choosing the shorter loan period (5 years) got the interest rate down.

My wife and I are sent pre-approved credit card offers all the time. They so badly want us to get into debt and play their evil game. I would never ever pay more than 10% interest on any loan. 26% is completely crazy.

I second and third Dave Ramsey. I have all his videos and they are totally worth the time to watch and master.

[OvRiDe]

Fuel economy per HP may have improved, and engines may have gotten more efficient, but I find it absurd that the average fuel efficiency for passenger cars in the US (http://www.bts.gov/publications/national_transportation_statistics/html/table_04_23.html) hasn't changed significantly in the last 20 years.

LOL, as someone that has been driving for 25+ years, I find it absurd that someone that has barely been alive for the said 20 year period thinks they are authoritative enough on the subject to even make that statement.

You do realize that your are quoting real life stats against ESTIMATES? Unless you have a 2010 Mazda 3 to compare it to. You also realize that they don't drive the car around a track for weeks or days at a time to get these estimates? Also in the last 20 years there have been some changes in Federal law that can effect the outcome of these estimates vs real life? Then there is the whole Highway speed limit laws that changed. Oh and lets not forget the whole unleaded gas vs leaded gas, granted that was 1979, but how long does it take for those stats to trickle out of the system. Now we have the whole 10-20% ethanol to deal with down the road.

EDIT: Here is an article that explains alot of what I am talking about.. http://www.caranddriver.com/features/09q3/the_truth_about_epa_city_highway_mpg_estimates-feature

As for the credit issue... I would like to say its a necessary evil, but that's not true. With that said.. its a damned if you do damned if you don't scenario. Hang in there Buzz, we have all been there. I must say its changed alot in the last 10 years. I remember a point when Banks were throwing CC's at customers, begging them to take them, and it led to the down fall of a lot of people. Just be smart about it and you'll do just fine.

[Lothair]

Handling Credit is simple. Don't spend money you don't have. You don't rent in Beverly Hills working at Taco Bell. It's sort of the same concept with Credit. You don't have to have the money on hand, but you need to be 99.9% sure you can pay back what you borrowed. It's as simple as that. Building Credit this way can be a very beneficial experience to those mature enough to handle it. Like it or not, quite a bit of life revolves around this stuff. That's not to say it does solely or is required of everyone, it merely means that life becomes that much easier with it. At least, those are my observations thus far. I don't know anyone without high risk/high pay jobs that are considerably well off and living comfortable. But then, I suppose that's all rather subjective. And there are exceptions. But I'd still say this applies to the bulk of society. Too bad they don't teach this stuff as a required class in high school.

Edit: As for getting credit options in the first place, I'd start with the basic stuff. Be consistent with payments on your bills is a good way to start. Find places that will loan you money that you already have and buy something with it, then pay it back on time, every time. Maybe a public loan service or something? Just an idea. Might or might not be a good one. :/

[x88x]

LOL, as someone that has been driving for 35+ years, I find it absurd that someone that has barely been alive for the said 20 year period thinks they are authoritative enough on the subject to even make that statement.

I never claimed to be an authority on the subject, I was merely passing along my personal experience, and data collected by those who do claim to be an authority on the matter (RITA). I'm sorry if I'm not old enough for you to take me seriously.

I did take a look at the article, and it does make a lot of good points. Looking at the actual data though, both from their tests and that people have sent in from their experience with their vehicles, I stand by my statement that my car gets better mileage than the equivalent new model. Using the side-by-side comparison tool on the EPA's website, I looked at the 1996 Protege, the 2000 Protege, the 2005 3, and the 2010 3. As it turns out, the rated mileage on all four are nearly identical. Where the big difference arose was in the actual mileage reported by owners.
http://i428.photobucket.com/albums/qq3/x13931x/protegeComparison.png
Of course, this drop in real-world mileage was accompanied by a rise in engine capacity and power....why a passenger car needs a 2.0L, 148HP engine is beyond me, but that's a different discussion for a different place.

Sorry Buzz, got a bit OT there. :P

[OvRiDe]

I'm sorry if I'm not old enough for you to take me seriously.

I wouldn't have commented if I didn't take you seriously. :P

Last comment on the user submitted results and we will stay on topic here on out... They are a crapshoot. There is no way to verify that those results are correct or fabricated or what their methods and environment entail, etc etc. So yet again they may be a general gauge, but not necessarily true to reality, just like the EPA estimates that are published. So all that said.. YMMV.

Also there was a typo in my OP.. I have been driving for 25+ years not 35+ years. :redface:

[AmEv]

I beat you all.

Geo Metro. 38-ish MPG. Almost can go from Utah to southern Cali.
(man, I miss the Geo....)

[x88x]

Yup, being able to do over 400 miles on a single tank does have its advantages. :D

[billygoat333]

I beat you all.

Geo Metro. 38-ish MPG. Almost can go from Utah to southern Cali.
(man, I miss the Geo....)

got you beat. if I keep my 95 saturn sl1 @ 55 mph, I can get 40~42 mpg easy. :D

did I mention my car has 222,000 miles on it? and has 4 doors and a trunk? (boot for you english chaps) ;)

[AmEv]

Wait.


I got talking to my mom. She said that it got 53MPG.

Don't know how, but....
(something about the muffler....)

[Xpirate]

Handling Credit is simple. Don't spend money you don't have.



I don't see why any of you would want a credit card any way. It's a total rip off.

You guys are correct. I am what credit card companies call a deadbeat because I do not carry a balance that can accumulate interest. Citibank shed themselves of this deadbeat when they started charging interest on a certain % of the balance anyway.

Now I am using one with 1% reward points. Every $1000 that the wife spends on the card scores me $10. I got Amazon gift cards and got speedloaders, a camera, printer ink, and other junk. The reward points make this new card nice. I pay no interest when the balance is paid in full, and I score Amazon cash. So my new card isn't a rip off or a necessary evil.

I'm going to try and pay my house taxes with the credit card just so I can get $50 worth of Amazon gift card. If the county charges a fee that is more than $50, it won't be worth paying with the credit card though.

Everything I have is paid for and it is total freedom.

[x88x]

Everything I have is paid for and it is total freedom.

Congrats! According to my calculations, if I can stick to the plan I've laid out, taking into consideration my current salary and conservative raise estimates over the next 15 years..and if I can get a renter in my apartment soon and keep one there consistently..I should be able to get there myself by the end of 2022. :D

Realistically, I'll probably move by then, which will change that, but I fully expect to sell my house at a net profit once I'm done with it, so we'll see. :D

[Spawn-Inc]

that seems very odd, if they lock the money in your account, i don't understand what they have to loose.

i was depositing a check one time and the lady had said they where very impressed with my history with my credit card over the last 6 months i think it was and offered me a $8000 line of credit, though it was at 8.5% but i still took it just to have. it's since gone to $13,000. and my credit card is at $5000.

i let it build up to about 300-400 then pay it off in full. it's a 1% cash back so to date (about 2 years) they have paid me $200-$300 to use their credit card :) i use it ALL the time. from as much as a thousand to as small as $2-$3.

[Kayin]

I still don't have any credit cards and never expect to get them. I don't really believe in spending money I don't have, and the fact that I own everything I have outright with no strings attached is a comforting one.

Luthien is still paying on her car, but that's because she took a bank loan out and then is paying that off. We own this place free and clear, and all we owe is utility bills. (bills bills bills.)

I simply don't see the point in all this credit this and that. Especially as it's illegal (and always has been) to discriminate based on credit as part of a hiring process unless you work directly with large amounts of money. I don't see anything in credit I need, and plenty I don't want.

[x88x]

I simply don't see the point in all this credit this and that.

I made a deal with myself a long time ago that I would only ever put myself in debt for two things: education and a house. I've been able to stick to that promise, and I think I'm better off for it. I think we appreciate things more if we have to work for them before we can have them.

[d_stilgar]

I made a deal with myself a long time ago that I would only ever put myself in debt for two things: education and a house. I've been able to stick to that promise, and I think I'm better off for it. I think we appreciate things more if we have to work for them before we can have them.

I am right there with you! I have some student loans, but I only use them to 1)pay tuition, 2)pay for text books, 3)pay off my wife's student loans or our house. The interest is deferred on mine until I'm out of school, and she's all graduated so hers are gaining interest. Even if I can pay for school with cash it makes sense to use the deferred interest loans to pay off debt that's collecting interest now.

[Kayin]

I'll get behind that one.

Getting an education should be a primary concern, and what it takes is what it takes.

I just don't see the point in people buying things (often luxuries) that they don't have the money for. I could have MUCH more impressive systems if I bought on credit, but knowing I did the work to get the ones I have is worth it to me.

FYI, even the blade I purchased wasn't on credit-it was straight cash (well, paypal.) They're less expensive because they're not "katana" per se, and also the fact that a lot of the shin gunto were made for the express purpose of killing the enemies of the Japanese, namely at that point Americans. Let me tell you I got a deal. And that's more what I'm about, honestly. I find myself good deals and get things that way, and own them outright, even if it's not as nice as what someone else has.

If you go into debt with an education, I get that. Medical debt, too, in this country I understand. It's luxuries (and owning a house is a luxury, financially most people don't need to own a house) that tend to bother me most. I don't recommend buying new cars, either. Poor investment to me. (and yes, we own, because it was passed down. Inheritance is one thing, buying when you don't have the money is another. if you inherited that or bought it outright, you earned it.)

[x88x]

and owning a house is a luxury, financially most people don't need to own a house

To each their own, but imo it's the other way around. Kind of like buying meat in small amounts is a luxury over buying it in bulk, even though you need a freezer (additional cost, regardless of if you already have one or not) to keep the extra meat good. You pay for the luxury of somebody else taking care of the place where you live (and paying when stuff breaks), and in exchange they take your money (lots of it), and all you get is a place to stay. When you buy a home, you accept the responsibility of taking care of the place where you live (less so in townhouses and condos, but still), but in exchange you actually get something for your money, in the long term. I don't want this to sound like I'm judging anyone else, because everyone's situation is different, but for me, in my opinion, it was financially irresponsible for me not to buy.

Take my situation:
1) I'm single. That means single income, and therefore, lower household income.
2) From August 2009 to November 2010, I rented an apartment. This was the cheapest apartment I could find in the area that wasn't..shall we say 'in a bad part of town' (in itself a luxury, I know), and not coincidentally, one of the smallest. I got a discount, and I was paying $920/mo (normally $1006/mo) for a 425sqft, basement, studio apartment in a decent sized complex with no reserved parking (most of you have heard me rant about the parking there, I'm sure :P ). Yes, this really was the cheapest place around, I promise.

I had been throwing the idea around in my head for a while, but around June-ish 2010, I decided to sit down and run the numbers, and I was, tbh, shocked. For not much more than what I was paying in rent, I could actually buy a house.

I looked around, it took me a few months to find something I liked, but I found it. I got a really good deal on it for a few reasons:
1) It is an older house, built in 1926 (which I like, but usually drives down the price for some reason :P ..and don't you start, UK peoples -_^ I know 84 85 now..whoops, isn't old there).
2) It needs a little work (mostly cosmetic, but that really drives down the price), but nothing major, nothing I can't do myself, and nothing that would have to be done before I could comfortably move in.
3) It has a nice bit of land for the area (1.7 acres in an area where just the land would normally cost more than I paid for the whole thing).
4) It's on the outskirts of a pretty high-ticket area, which means the property values will probably only go up.
5) ...did I mention the land? :D Yes, yes, 1.7 acres isn't much in rural areas (I lived on 20 acres in rural DE for 10 years...and loved every minute of it), but around here it's practically unheard of in the price range I could afford.
6) It has a nearly complete efficiency apartment attached (just needs a real door separating it from the house)...read: alternate income stream. :D

Long story short, once I considered my options, imo it just didn't make any sense to rent. If I'm going to spend that much of my income on housing I might as well get something out of it, even if it isn't obvious for quite a few years. It might cost a bit more today, but in the long run there's no comparison.

[Xpirate]

Credit.

We have all started talking about financial stuff and forgot about Buzz.

Dude, most of us have been there. I tried to get a credit card at 21 and was denied. Then I tried to get just a loan and pay it back just to establish credit and was denied again. I finally got a student credit card when I was 23. It had a credit limit of $300. I used it just enough and paid very minor amounts of interest just to get credit limit boosted up. I got the credit limit up to $7600 before I canceled the card for a better one.

I ended up using that card to pay for books and tuition. I looked up my Quicken records and I have spent a grand total of $504 in interest on that card. I have not spent a dime on interest on my new card and the credit limit has stayed the same because of that.

I had more than $1000 in the bank before I got that credit card. Establishing credit is a really long process. You just have to keep trying because eventually you might need it. I am living proof that things will get better for you financially if you have a good plan for your financial future.

I read all the baby steps on Dave Ramsey's site yesterday. I never put myself into any real serious debt, but I did pay off student loans, a car, and the house. His steps and other advice are pretty much what I did to secure myself financially. So I recommend what he teaches.