[pjteacher]

My 24 year old son is new to the workforce and wants a car already. He is only working part time. I told him to establish good credit he should keep his money in the bank and take out a secured loan, then pay it back early. Are there other ways?

[Fr_Chuck]

Is he a recent college graduate ?

Best thing, don't buy a new fancy car, buy a cheap low cost used one to start with if he has to get one.
What is he driving now ?

[JBeaucaire]

Save up the money to pay cash for a used car.

Then put the money in the bank and ask the same bank for a secured loan to buy the car. They will approve it.

Make sure the loan has no prepayment penalty, then pay 20% of the savings onto the loan for a period of 5 months.

After five months you will have eliminated unnecessary debt and established you can make payments on an installment plan and pay it off in a timely manner. It will look awesome on your credit report, and you only generate a few months of interest.

Then save up to buy a living room set, and repeat the process. The trick to debt is NOT falling into the trap banks want... they want you to sign away a part of your paycheck to them forever.

Save up for what you want, buy it. If you're planning on buying a house, use the technique above to purchase a few things the year before. When it comes time to buy the house, you will have three benefits:

1. You know how to save money, so the down payment will be attainable
2. You have established credit
3. You have NOT established DEBT at the same time, thus your debt-to-income ratio should be zero.