I live in the United States, am around 22 years of age, and recently graduated college with around $12,000 in student loans. I have had a full time job for around 4 months that pays around $55,000 a year and I live my parents so my living expenses are low.

My car is starting to become unreliable with it just passing 200k miles on it.

I'm looking to buy a car around $20,000 - $25,000. My credit score is a little below average (I think around 670), and I have very little credit history. Never had a credit card, or any bills to pay.

I'm starting to apply for car loans, but I'm noticing that I keep getting rejected for a loan of $15,000 because I have no credit history.

How do I improve my credit fast so I can get approved for a car loan and not deal with the headache of an unreliable car?

The only way I can think of is it start paying my student loans now even though I am still in grace period, but will paying them in the grace period improve my credit score since they are not technically due yet?

Should I open a line of credit?

It's currently the end of October and I would like to get that car around late December.

  • 7
    You have 5k-10k available as a down payment? Why not find a used car for that amount?
    – kponz
    Commented Oct 31, 2017 at 21:34
  • 2
    Fine answers below, I agree with buying a less expensive car, opening a credit card and pay it off monthly, and saving up rather than paying student loans early. Going from being declined to getting approved in a few months would mean you're getting a pretty bad interest rate most likely.
    – Hart CO
    Commented Oct 31, 2017 at 23:09
  • It’s not a stretch to think you could get reasonable (not great) auto loan rates after about 6 months of good payment history on a credit card.
    – Rakurai
    Commented Nov 1, 2017 at 0:42
  • A car is the worst investment one can make. Having to also pay interest on it will destroy a huge amount of potential savings. If you want a fun car, put a little research in and there are some super fun cars around for cheap! If you want a reliable car find a mechanic you trust and take your used car purchases there before buying. Will save you heaps of potential hassles and could be the start of a great relationship! Have fun shopping :) PS. Just because a car is new does not necessarily mean it's reliable! Commented Sep 30, 2020 at 0:02

4 Answers 4


Credit is like dignity - it takes a long time to build but a short time to lose.

Your credit history is mostly made up of your prior activity for several years. There's no "quick fix" to raise your credit score in a short period. Paying your student loans on time will help, but it will take quite some time for that activity to make a big difference in your credit.

If you can't get approved for a car loan of $15k, then perhaps it's time to either reset your expectations or save up enough to make a large down payment if you want a more expensive car. Instead of prepaying your student loans that are not due, save up that money for a down payment.

You can get an incredibly reliable car for much less than $15,000.

Also, make sure that you will be able to afford the car payment when your student loans do become due (based on your current salary, not some hypothetical future salary)

Another plan: drive your car for another year, pay off your student loans in that time, and then you might have enough credit history to get a better loan.


I am 22 and was asking the same questions at age 18. I first started by getting a small credit card and paying it off before the end of each month. I use this credit card for groceries/gas small expenses. Then when I built up my credit more I then began to look for loans for expensive cars. The first being around 22k, the second around 41k. You may want to look at buying a much cheaper car.

I would suggest that you look into starting a small credit card and get into a habit of paying it off every month and paying off your loans.

I would suggest saving as much money as possible to buy a car, the less amount of money you need to borrow the better. Having good credit is great, but nobody turns down people who wish to buy with cash.


You are planning on buying a car that is 50% of your salary. Add your student debt to that and your total debt is >50% of your salary. I would suggest getting a few credit cards to build up credit, but can you manage that? Buying a 25k car with 55k salary is overspending. Get a second-hand car for 7k or so. Plus, buying a new car is not smart either, from a pricing standpoint, if you really want a new car, buy one that is 1 to 2 years old.

  • I agree with your point about finding a car a couple of years older, but your point about it being > 50% his salary doesn't make sense to me. A car will likely have a 3-5 year contract. I haven't done the math, but if the payment is $400 - $500 a month, that's do able at 55k even after you take out taxes. Federal student loans are usually set up at 10 year payoffs, so I doubt his student loan payment is very much either.
    – curt1893
    Commented Nov 1, 2017 at 16:11
  • 2
    @curt1893 I agree the math is off. It's doable, but it is absolutely necessary? Why put yourself in debt if not necessary? Why does someone at 22 need a new car? It's sounds all very American style ;) (this come from a European who never had debt in his whole life).
    – brt
    Commented Nov 1, 2017 at 18:31
  • 1
    Never said new car. (European makin assumptions lol)
    – Jimenemex
    Commented Nov 3, 2017 at 18:07
  • @JustinJmnz 20-25k sounds like a new car ;)
    – brt
    Commented Nov 3, 2017 at 23:28

I would suggest talking to your parents about potentially co-signing on the loan with you. Just make sure that you are the primary holder of the loan. Sure, there is some risk for your parents, but they know you better than anyone so let them make the decision if they want to help you or not.

If for some reason they can't help you, such as they've declared bankruptcy, then following the other answers' advice is the way to go.

  • 1
    Also make sure the parents are willing to pay the loan when the OP decides not to.
    – D Stanley
    Commented Nov 1, 2017 at 16:15
  • 1
    Also make sure the parents are willing to continue providing you cheap living space while you pay for your car. They are probably expecting you to save money in preparation for living on your own, not subsidizing a new car.
    – chepner
    Commented Nov 2, 2017 at 13:49

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