Hi, my first time in the community. Hopefully I present this properly.
My daughter just graduated college with her nursing degree. She has job at a hospital. Now she needs a reliable car.
I am worried that she doesn’t have a credit rating and if she has to finance any of the car, she will have to pay higher rates. She is not looking at getting the car for a couple of months. Is there anything she can do to build credit during this time and should we look to see what her credit is now?
I asked A.I. for reliable and inexpensive vehicle models either new or less than 2 years old and it suggested some popularvehicles include the Nissan Versa, Hyundai Elantra, Kia Soul, and Toyota Corolla. You might find new at $20,000 but even older models going back are generally reliable. For a medical professional, I would look at probably 2 years or newer although Toyotas might have a very good long life. My Toyota truck has 222,000 miles so far.
To help your daughters credit score over time, adult member of the family with good credit should add your daughter as an authorized user on your credit cards. You will likely need to cosign on her loan if she has limited credit history.
She should check her credit status. She can get her full credit reports weekly from each of the 3 credit bureaus and consider getting an account with Credit Karma to monitor her credit score and reports.
Side note: She should do a credit freeze- get the Credit Karma account before the credit freeze and would need to unfreeze when she obtains the auto loan.
Please do not do this……..
Nelly, if you have listened to Clark for any amount of time you would have heard him talk about getting a credit card while you’re still in college. So your daughter would have already established a credit rating. Now you’re playing catch up. She should buy what she can now and worry about a fancy car later, after she has some credit and can get a car loan.
Congrats to your daughter.
Not credit, but an additional thought, if you belong Costco, they have a car buying plan that is worth a look to save dollars. Might even be worth joining to get the credit.
One option depending on your own financial situation is that if you can afford to pay cash for the car you could buy the car in your name and then let her pay you back over time.
Re reliabilty we have been buying new cars since about 1960.
My experience is that the most reliable vehicle is Toyota and the least is Ford.
One other option for a parent with means is to give a monetary gift to the child to use to obtain a loan. This pathway could help the child build up their credit score. In 2025 the gift can be $19,000 without any tax considerations with higher amounts requiring filing Form 709.
While I agree the “owner finance” scenario would work…..I would not want the liability of the car being in my name.
The car should be well insured or limits that meet the requirements of the state of residence and an umbrella policy would serve as additional protection.
The daughter should pay the premium for the coverage.
Sorry, I have to laugh.
At age 19 I moved out and went to college many states away. My parents put a down payment on my car, a Camaro, a sports car.
I was given the vehicle payment book and had to pay my own insurance too.
Oh, and I was being taught to drive my manual transmission car by my college dorm-mates! These were the guys who sat in the basement, drinking and playing cards. The college was part of UVA, known as a top party school.
As you can see, this background was not necessarily a pathway to success.