Can't buy a house without credit history, what should I do?

For just about anything you want to get off your chest about credit cards.
3 posts
Xcape F8
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Joined: Fri Jan 20, 2012 3:25 pm
Location: Salt Lake City UT

Can't buy a house without credit history, what should I do?

Postby Xcape F8 » Fri Jan 20, 2012 4:29 pm

I am 24 years old and going to college. My goal in life was to go without a credit card and never acquire any real debt. I have been able to do this comfortably for my entire life to date, paying for things only after I had the money to buy them. I own a car, truck, "toys" etc. I even pay my rent through debit cards.

The real slap to the face came a little while back when I went in to my Credit Union to get a loan for a house (more than enough money for a down payment and able to pay the payments) surprise to me, I was rejected due to no credit history. The alternative was to prove that I had 4 monthly, recurring payments one of which was required to be rent for more than 6-12 months (I don’t recall the exact number).

So I wasn’t able to get the house and I now am admitting to the fact that I need a credit score, I need help due to not knowing anything about credit cards or what I qualify for or most importantly how not to get dragged through the mud my first time out.

P.S. I know how to be responsible with money I don't need money talks, just facts about cards, line of credit, and info on how to build a credit score quickly.

P.S.S. I have been looking at the Chase Sapphire card does anyone know what kind of credit you need to open it?

Thank You

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Location: Los Angeles, California

Postby Celestine » Sat Jan 21, 2012 9:23 pm

I just can't believe that you bought the mentality of "Credit Card is the Devil". There is no fast way to build a credit. It takes years from having no credit history to having one. Some people does think the way you do about credit cards. But credit cards are not the one that will bury you in debt. It is yourself who will bury yourself in debt if you can't or don't control your spending. Not to be political but that is a liberal way of thinking about credit cards that can bite you hard if you want to buy a house or other stuffs that requires good credit history.

Having credit cards or charge cards requires discipline, personal, and financial responsibility and accountability. Knowing how to be responsible with money and actually putting it into practice are two different things. So you should have known the ups and downs of credit cards if you were as you told "responsible with money".

My two cents... since you have no credit history, try to apply a credit card from where you bank. I got my first credit card that way to build my credit history from nothing. Then I expanded to other lenders after a year or so. You don't need any "fancy" credit cards right now. A regular credit card will do or a secured credit card. Watch out for the credit card APRs. But if you will pay balances in full every billing cycle, then APRs don't matter much.
"Nearly all men can handle adversity, but if you really want to test a man's character - give him power." - Abraham Lincoln

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Postby tigerowl06 » Sun Jan 22, 2012 12:12 am

Hey Xcape,

Ditto on hitting up your bank. If you are otherwise in a financial position to buy a house, you must have a nice chunk of money saved. Go apply for one of their regular cards. If you use chase, ask for a Freedom Visa. If they reject the application, talk to your banker and ask him/her to put in a special request. This request will include information about your bank accounts and how long you have had them, which is information that is not considered in the original decision. If doing a special request, go for a small credit line ($500.00). If you use the card as much as you can, you will get a CLI very quickly.

This is how I did it. I was 24 when I got my first card (a Chase Freedom Visa) with an income of 25K per year (I was a graduate student). It took some doing back in 2009 with the financial crisis still going on. Right now (2 years, 3 month later), my credit score is 735. The median is 720. So there you go, it takes about two years to reach median credit, if you do everything right.

Also, apply for a second card from someone else after about 6 months with your first card. I like Discover More myself. It is a bad idea to let one lender control the entirety of your credit history. If you do, they know that you aren't in a position to cancel the card without forfeiting a BIG chuck of your credit score. Also, this is a reason not to go for a card that you don't want as your first.

Good luck!
Chase Freedom ($2.5K, 10/2009)
Discover it ($6K; 03/2011)
Amex BCE ($19.5K; 02/2013 - 2011 BD)

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