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How to own a house with no established credit?
I've been living in my apartment for for about 5 years and have put about $35,000 into this box I will never own. With that kinda money I could've picked up at least a modest centerblock home somewhere.
I need ideas on how I can own my own property. I don't really care if it's a sharecroppers shack as long as it's my property that I can invest more into.
The only way I can think of to build up enough credit and money to buy a home is to work hard and live on streets for a few years or stay with a girl that's on section 8 to save money.
Any help would be appreciated.
Credit card fees alone will wipe out a huge chunk of my paycheck.
Been paying bills for years and nobody has reported it to my credit record.
Only way I can own a car is if I live in it. We are struggling. lol
I understand credit. It's just that I would have t completely rearrange my lifestyle to establish a line of credit.
I'm considering getting a credit card but I just hate the fact that they can change the fees when they feel like it and even charge me more money if they decide to increase my credit limit. It seems silly to me but I guess that's a part of the game.
And when you're just starting out, the interest rates on the credit cards you can get are really high. Would have to make a bunch of small purchases over time I guess.
I'm in North Carolina, US
2 Answers
- 1 decade agoFavorite Answer
you can own a house without credit but you are probably going to be stuck with a crazy interest rate that is going to make your monthly payments outrageous. my best advice would be to buy a car with an auto loan and start a credit card (you can get credit cards without annual fees and only buy what you can pay off each month). don't run up your debt but just get your credit started. even having bills in your name will give you some credit. good luck.
- Anonymous1 decade ago
Based on the added comments I think you misunderstand credit.
Having credit and showing how you use it will tell future lenders if you are a good risk. This means you do not have to run large balances as much as show that you have used credit wisely.
Having credit cards that you pay off each month will go a long way. If you ran a balance and then later paid it off there is some slight extra benefit (you ran up a bill and then paid it off).
The same when it comes to a car loan.
You did not mention what country you are in so I can only guess the US given the '$'. In the US one factor is how long you have had an account. The oldest account matters as it shows behavior over time. 3 years is a critical point. Having 3-5 accounts is more or less required. The idea is one account does not tell the scoring system enough about you. If 3-5 merchant or credit firms have accounts with you it becomes statistically interesting.
Note that not all of your rent was wasted. If you borrow to buy you are paying costs and interest. There really is a cost to having a roof over your head. At the same time if you own a property and it happens to rise in value you can get back more than you paid in total interest. Or you might not. Hence renting has no ability to get back the cash while being an owner does have the possibility. When you are the owner you have extra costs (maintenance, taxes, insurance). You may pay a good bit more each month when you add it all up. Many times it is better to own but do not assume that renting is always a losing proposition when you factor in all the different details.
