Do I really need a credit score?
- Thread starter DeereClone
- Start date
My advice is do not rush into buying a house. I bought a house 18 months out of college and lived there for four years when I got a promotion opportunity in another town. By then a couple hundred newer homes were built in the area and my house lost value! It takes a long time to build equity on a house.
People actually get rejected on their first credit card? No f'n way! I mean, yeah on the first one the interest rate will be garbage and the credit limit will be non-existent but rejected? I'm shocked.
https://creditcards.citi.com/credit-cards/citi-dividend-card/
$100 cash back if you spend $500 in the first 3 months.
$100 cash back if you spend $500 in the first 3 months.
yep, got rejected from everybody.
Once you are no longer a high school, college student they all of a sudden "care" about the risk, but if hes still in school he should be fine
I think all the advice about establishing a credit history is good I"d just like to emphasize I agree with the few comments that asked whether it made sense to buy at this point in your career.
Pluses:
* start building equity
* it is a buyer's market
Minuses:
* real estate is not appreciating like it once was....economy is still very shaky
* might limit your mobility this early in your career being tied down to a mortgage
* upkeep - you're young, you have your whole life ahead of you to be tied down to house upkeep. Take advantage of the freedom of a rental -- have fun, put extra time in at work that your fellow co-workers are unable to as they're tied down with family/home obligations.
Pluses:
* start building equity
* it is a buyer's market
Minuses:
* real estate is not appreciating like it once was....economy is still very shaky
* might limit your mobility this early in your career being tied down to a mortgage
* upkeep - you're young, you have your whole life ahead of you to be tied down to house upkeep. Take advantage of the freedom of a rental -- have fun, put extra time in at work that your fellow co-workers are unable to as they're tied down with family/home obligations.
I think you have to be employed at a job for 6 months before you can get a mortgage. Earlier this year when I looked into redoing my mortgage to get a lower interest rate that is what I was told. The company I was working for was taken over by a new company so technically I was a new employee but have worked there for several years.
Not really a dumb concept when you look at it. They need proof that you have the ability to pay for something at a later date when you said you would. Also, pick a good card that can give you rewards.
You're only chance is to do an FHA loan and have an immediate family member as a coborrower. Otherwise you will need at least 2 open credit lines with a minimum of 12 months history. And I would recommend to have small balances on those credit lines when you apply for the loan. If you go to a bank to take out a loan in just your name with no credit, there is no bank that I know of that will approve your loan. The main reason for this is due to a very high percentage of mortgages that are fannie or freddie backed. Fannie and freddie have their guidelines, and having credit is one of those guidelines. Your best bet will be to find a small local bank that is willing to take a chance on you.
a lot of things have changed in regards to getting credit since 2008
when i was in high school in the mid 2000s capital one was begging me to take a cc but now ive heard similar stories where people with full time jobs but no credit score cant get a cc on their own
No this is not accurate. As long as the person that is graduating from college enters into a new job in the same field, then he can close a mortgage after receiving just 1 pay check.
And cypwr, sorry to tell you this, but your lender didn't know what he was doing. This should not have negatively affected your ability to get a loan at all. All you would need to get is a letter of explanation from your employer and you would be fine. The only scenario where there might be an issue is if you were going from strictly base salary income to more bonus or commission income.
I'm sure there are lots of good responses above, but might as well throw in my 2c.
If you're going to get a card, I love my discover card. The cash back is great, if you pay for everything on it and pay it off every month, you can use the money for stuff you hate paying for. (I buy work clothes with it). Caveat: I'm saying this because with the financial situation you describe, I'm assuming you have your **** right and won't **** your new wages down your leg. If not, don't get a CC, try and find a local bank that will get you a loan.
Speaking of banks, yeah, local no matter what. The megabanks sound like they have a great deal until you see where they're making that back. I've found, anecdotally, that when a financial product is either 'free' or marketed, it's not a good deal.
If they're advertising, it's because they know they're making bank for everyone who swallows the hook. Think about gold...5 years ago they were running ads for people to buy your gold, now they're running ads saying you should buy gold because it's going up so much. Similarly, if a place is advertising free financial advice, how are they keeping the doors open? I'd rather pay someone to have my interests in mind than to go somewhere for free for someone to advise me that is getting paid by someone else who wants my money.
If you're going to get a card, I love my discover card. The cash back is great, if you pay for everything on it and pay it off every month, you can use the money for stuff you hate paying for. (I buy work clothes with it). Caveat: I'm saying this because with the financial situation you describe, I'm assuming you have your **** right and won't **** your new wages down your leg. If not, don't get a CC, try and find a local bank that will get you a loan.
Speaking of banks, yeah, local no matter what. The megabanks sound like they have a great deal until you see where they're making that back. I've found, anecdotally, that when a financial product is either 'free' or marketed, it's not a good deal.
If they're advertising, it's because they know they're making bank for everyone who swallows the hook. Think about gold...5 years ago they were running ads for people to buy your gold, now they're running ads saying you should buy gold because it's going up so much. Similarly, if a place is advertising free financial advice, how are they keeping the doors open? I'd rather pay someone to have my interests in mind than to go somewhere for free for someone to advise me that is getting paid by someone else who wants my money.
With what he's saying for his loan setup, he might have those handled a bit. Between the 20% and having a 15 year mortgage instead of a 30, should have a lot of equity built quickly.
Shop around. I know if at least 2 small town banks that don't use your credit score at all. If you have a good steady income, low obligations, and a big down payment, someone will loan you the money. Get on the phone and start calling small town banks.
im involved with underwriting residential mortgage loans
and if you have minimal or no credit history - it's a tough call because its 100% in the hands of the individual underwriter. They do have the option to go for non-traditional credit such as rental history, etc... but it will definitely have an impact on your rates
and if you have minimal or no credit history - it's a tough call because its 100% in the hands of the individual underwriter. They do have the option to go for non-traditional credit such as rental history, etc... but it will definitely have an impact on your rates
This is not necessarily true. Unless you were working full time in the same profession while in school (unusual), most lenders are going to want 1 year of history in the same field.
1 year is kind of a magical timeframe in lending. Credit references are considered new for the first year, and even if handled perfectly can drag your FICO down. Until you've shown employment stability, lenders aren't sure you can handle a job.
Bottom line is if you're considering a mortgage, stay in your field, and build your credit score. Start with credit cards (store cards are a good way to start). Work your way up to installment loans (repaying student loans, car loans). Mortgage lenders like to see lenders who show more and more responsibility. Build your down payment. It's harder to decline someone w/50% equity than it is someone w/only 80%.
And never, NEVER, make a late payment. And if you have to be late, move heaven and earth to make sure your 30-day late doesn't become 60 days.
