Can this be possible? “I don’t have any negative credit? Why was I declined?” It could be because of a lack of credit. It is like this. A person wants to be a police officer. He says, “I have never been arrested or in trouble with the law, please hire me.” That might be true, but what have you done to prove that you can be a police officer? How far have you went in school? Have you done drugs before? What have you done in your community? There is nothing to base whether or not you should be hired. It is the same with credit. You don’t have any negatives, but how can a lender base whether or not you are a good risk to pay back your credit? It is not like you are asking for a $500 loan to be paid back over six months.
The average car loan is now $32086, which works out to be around $633 a month. That is a big committment for the auto industry to give a person a loan for. There was a recent study that showed that 24 out of the top 25 metro areas in the United States cannot afford a payment with this kind of loan. The only way that they can judge if someone can afford a payment like this is from credit history. If you don’t have credit history, you most likely will be declined.
A person will judge you by your fruit. If there is a tree with no fruit, how can we know if we are getting a beautiful apple or a sour lemon? It is the same with an auto lender. We will discuss more of this tomorrow and give you ways that you can establish credit. Till next time.