Enrique

Don’t do Amway.

John

Holy Cow! Why DO we have to go into debt to build good credit? I’ve never really thought of it that way before, but that is kind of true. Think about it. The FICO credit rating really does reward those who go (at least temporarily) into debt.
I guess the easy answer is that you don’t really have to go into debt. What you have to do is show that you can responsibly pay back any money that you borrow so when the time comes to purchase something big like a house or a business loan the lending institutions can look at your track record and see that you are likely to pay them back on time. If you have a bad track record or no track record, they won’t trust you and they’re going to want more money for their risk in the form of a higher interest rate.
One way to show responsibility without actually being in debt is to pay off all of your credit cards every month. Ironically, the more credit cards you have (to an extent) the more you are rewarded because debt-to-income ratio is one factor used in your FICO score. But having a car loan that is being paid on time is great for your credit–much better than if you walked into the dealership and paid for a vehicle in cash.
Of course, I’m not sure what you were expecting from us when our government can’t even come close to staying out of debt and last year the average American savings rate was actually NEGATIVE (meaning that Americans as a whole spent more money last year than they made!). So much for saving 10% of your salary.
Such is the American way I suppose!

Matt

FFR, anyone who is thinking of buying a new car or the like, head over to http://www.carbuyingtips.com first, to if anything, understand how the processes work many times…so you don’t end up making an ignorant decision like this (not that you would now, but something similar).

Wei

I don’t think he’s learned anything. So instead of paying $15k on a $9k car, he’s now going to pay $28k on a $19k car?

I can just picture Peter Griffin saying “Yeah… I’ll give them more money. That’ll show em.”

y.

It is not necessary to build your credit history or have credit cards. If you don’t have the money, don’t buy it. If you need a car, save up and buy something super-cheap. Then save up some more, and upgrade.

If you want to get a mortgage, you can get a mortgage with manual underwriting instead of a mortgage based on a credit score.

Jennifer Lynn

… *is speechless*

In fact, this ordeal is so blatantly disturbing that it just crashed my system

hmph =^..^=

Steve Johnson

It’s probably way too late for this to have any chance of working, but there is one tactic that can occasionally work in situations like this.

Dealerships rarely carry their own contracts. They are nearly always sold to the financing institution (like a local bank, Chrysler Credit, GMAC, Ford Motor Credit, etc.).

One can call up the financial institution, bypassing the dealership entirely, and tell them that ‘yes, I realize this is a contract and it’s legal. BUT–the dealership hoodwinked me and I can NOT afford this payment. If you buy this contract, I will NOT make the payments. I know I will be stuck with penalties and all kinds of stuff, but I simply cannot do it.’

Financial institutions are not really wanting to buy a contract that will go into default right out of the box. They lose, and it costs the dealership nothing, as most contracts from big dealers are purchased on a ‘non-recourse’ basis, meaning that once the contract is funded, the FI has no recourse against the dealer .

Another way to contest an obviously outrageous contract is to threaten the dealer with action through the Attorney General’s office alleging improper disclosure of contract terms. There is a box on the contract that states the amount borrowed, rate, etc., and it MUST be covered with the borrower by federal law. A lot of F & I guys will gloss over this section of the contract so the borrower doesn’t get scared. If that happens, then the borrower does have a little bit of recourse–the basis of a threat, if nothing else.