So I was declined in my loan application because I have insufficient credit history (i.e no credit at all), so I am kinda miffed.
Yeah, same thing happened to me when I applied for a pre-approval on a mortgage for a house... Apparently Taking out a $12,000 car loan and paying it off on schedule didn't count for squat...
So, I'm taking a third option, namely buying land (which you can easily find for under $30K around here), which I can put AT LEAST 20% cash down on (I've never heard of a bank denying any kind of loan to someone who could put at least 20% down on it, and I could go up to 33.33% without putting myself under too much financial strain), then using the credit history I built up/land itself as collateral to take out a construction loan to get the house built (there's at least one local pre-fab housing company that has a nice, two-section 3-bedroom ranch style for under $60K)....
Still, like I said to my bank's loan officer, "What you're telling me is that it would be better if I had a mountain of credit card debt and was just making the minimum payments than taking out one loan and paying it off completely and on time.... Gee, isn't that the same kind financial dumb-@$$ery that got us into the current economic mess in the first place?"
...Needless to say he didn't have anything to say to that!
BTW, what did you think of my Final Fantasy Leader graphics?