Are You Ready to Buy Your First Car?
Okay so maybe you drive a beater that your parents handed down to you or maybe you’re rocking an old sedan that your grandfather gave you for your birthday.
But you’re probably thinking ahead to graduation and trying to figure out how to buy the car that you’re going to drive to interviews. There are definitely some important steps you can take to set yourself up for buying success.
If you want to purchase a vehicle at one of the RI used car dealerships near you, you’re going to need financing. And you won’t be able to get that unless you establish yourself with some credit.
Having no credit history can be just as frustrating as having bad credit, but there are a few good ways you can start building yours responsibly.
First and foremost, always pay your bills on time. Believe it or not, the monthly electric bill payment (or lack thereof) for your apartment will show up on your credit report.
If any account is left unpaid and goes to collection, that can stay on your record for up to seven years! So make sure you stay on top of those bills.
You can also use credit cards to build your score. Spend a little on your card each month, and then pay the full balance when your bill is due. Keeping low balances is essential to earning a solid score.
Loans are another great way to build credit, but they’re hard to get without much financial history under your belt. If you’re currently in college but your loans are in a parent’s name, ask if you can become a co-signer.
By taking on some of the responsibility for your school loans, you’ll also help your own score.
Work a Job and Keep Your Pay Stubs
If you’re going to purchase your first vehicle, lenders will want to see that you’re making enough money to successfully make your auto loan payments.
If you don’t already have an income, get out there and get one. You’re going to need to earn enough cash to pay for your new ride.
And hang onto those pay stubs because they’re perfect evidence of how much you’re making and how much car you can afford.
Talk to a Co-Signer
Let’s face it…despite the independence we all want to feel, sometimes it’s a good idea to ask for a little help. Buying your first car could very well be one of those times.
If you haven’t built a credit history yet or you don’t have a huge down payment, asking a reliable person who has more financial experience can be really helpful.
Plus, once you have your loan, even if it’s with a co-signer, it will help you earn good credit. And you’ll be well on your way to building a positive financial future.