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By: First International Bank & Trust
Ashleigh Smith, Marketing Coordinator, Fargo South, Member FDIC
Buying your first car can be nerve-wracking, but it doesn’t need to leave you with fried nerve endings. By approaching the task realistically and with a couple sidekicks, you can have your car, and drive it, too!
Soon after graduating college, I was looking to solidify my transition into adulthood by purchasing my first vehicle on my own. At first, I was excited, dreaming of a shiny, black SUV. After a couple days of searching online and seeing the huge price tags, I got discouraged. Then, I got realistic. Buying your first car is overwhelming and I realized that I couldn’t do it alone, so I called in reinforcements that I could trust. My grandpa and my personal banker.
My process was broken down into three main steps: Financing, Choosing and Enjoying.
Financing the Car
When you are looking to buy your first car, the first thing to consider is budget. What you think you can afford and what you can actually afford, I learned, are two totally separate things. I sat down with my grandpa and looked over my spending to create a budget. This gave me a realistic view of how much I could truly afford to spend, not cutting myself short of saving for emergencies.
After I determined a monthly payment that I could live with, I went and talked with my personal banker. Using that amount, she determined a range that I could spend on a vehicle. I opted for the lowest total purchase amount, as it would be with me having a 3 year loan, rather than a 4 or 5 year. At that point, she pulled my credit report to help determine the interest rate I would qualify for. I didn’t have any credit history – so my grandpa offered to co sign on the vehicle loan so I would qualify for a lower interest rate.
With the ease of knowing I was pre-approved, I started confidently searching for my dream (within the budget) car.
Choosing the Car
There are several features of a car that can affect your budget, both at the time of purchase and in the future. Monthly and annual upkeep costs are influenced by the car’s place of purchase, brand and year.
Here is a list of questions to ask yourself when looking at a car:
Talk through these questions with your sidekicks. Chances are, they have been through this process before and can help you make your decision.
Enjoying the Car
After all the tough decisions I had made, it felt great holding the keys to my brand new-ish car! Below is a picture of myself and my grandparents, just after college graduation.
No matter where your car buying journey takes you, you can have peace of mind knowing that an FIB&T personal loan expert is only a phone call (or short drive) away!
Kelby Jennissen, Personal Banker, Fargo South, Member FDIC
Working in the banking industry, it seems that everyone you meet has questions regarding their credit score. Everyday thousands of commercials are aired about the importance of your credit score, how you can protect it, and where you can find a “totally free” credit score; yet the vast majority of people know very little about their score. I have looked at hundreds, if not thousands, of credit reports and have compiled a list of the most common questions.
Q: What do banks do with my credit score?
A: Your score is a risk indicator depicting the likelihood that you will repay your loan in accordance with the original terms and conditions. A high score indicates a lower level of risk, which can lead to a lower interest rate.
Q: Who calculates my credit score?
A: Your credit score is calculated by the big three credit reporting agencies (Experian, Equifax and TransUnion). Each agency records your credit repayment history and enters it into a mathematical formula created by FICO (Fair Isaac Corporation). This formula is broken down into 35% of your repayment history, 30% in amounts owed, 15% in length of credit history, 10% in types of credit used, and 10% in new credit*. This is why it is extremely important to make your payments on time, as this is the biggest factor when calculating your score.
Q: My car payment was due on the 15th and I just paid it on the 18th, is this going to hurt my credit score?
A: Generally no. Most creditors only report a payment as late to the credit reporting agencies when it reaches the 30 day mark, however, be careful, as not making your payment on time can lead to late fees and unwanted phone calls from your lender! If you have any questions about when your specific creditor considers your payment late for credit reporting purposes, you should ask the creditor.
Q: How long does a late payment stay on my credit report?
A: A long time! A late payment, Chapter 13 bankruptcy, foreclosure, collection or other public records will generally show up on your credit report for seven years. Chapter 7 bankruptcies generally show for 10 years, and a tax lien may be indefinite. Save yourself the worry; live within your means and make your payments on time.
Q: What is considered a good credit score?
A: Generally speaking there is no set number for a “good” or “bad” credit score. As long as you are paying your bills on time and do not have any judgments, collections, or bankruptcies, you are doing just fine. That being said, generally anything higher than a score of 700 is considered good, and 760 or higher is excellent!
Hopefully this has answered some questions about credit scores you may have. If you would like more information, please visit www.myfico.com or visit with your local FIB&T loan officer!
As a Personal Banker, Kelby assists customers with a variety of banking needs with special focus on consumer lending and is located at our 25th Street branch in Fargo.
In his spare time, Kelby enjoys spending time with his friends and family, exploring the outdoors and playing basketball.
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