Your First Big Purchase

• The best option is to save enough money to buy what you have in mind. Open a Community Bank Savings Account and name that account "iPad" if that's what you're saving for. Naming your account helps you focus on your reason for saving. Next, set up Automatic Account Transfers from your Checking Account to your Savings Account to help grow your saving balance.
• Don't fall into the payday loan option! Their advertising is slick and inviting, and they make it seem so easy to get fast money until your next paycheck. But with interest rates as high as 36%, it's easy to spiral into an endless cycle of debt. If you're even considering this form of financing, read 4 Reasons You Shouldn't Fall Prey to the Payday Loan Trap.
• Sometimes a much larger purchase requires financing. If you're buying a new car or motorcycle and need to borrow money, consider a Community Bank Auto Loan or Motorcycle Loan. Check our current, competitive Loan Rates, and use the Auto Loan Calculator to determine your monthly payment so you'll know exactly what price range to stay within while shopping. If you can't decide on the term of your loan, use our Comparison Calculator to calculate the monthly payment options.
• Our Buying Your Next Vehicle Checklist below is a helpful tool to use when considering a new vehicle purchase.
• Other large purchases, such as furniture, jewelry, or art, can be financed with a Community Bank Signature Loan.
• When you make a large purchase that requires a loan, your credit will be reviewed. The better your Credit Score, the better your interest rate. Click here to learn why you should care about your credit score.

Consider these factors when planning a new purchase:

• Before beginning your search, speak to a Community Bank associate who can help you determine your budget and eligibility for one of our competitive-rate Auto and Motorcycle Loans. Not only will this help you focus your search, you'll have more bargaining power with a dealer if you already have financing in place.
• Once you've determined your budget for a new vehicle, stick to it and don't overspend, even though you may be tempted. Knowing your budget before you begin looking can help you stay in control of the buying process.
• Establish what you need and want in a new vehicle, compare models, and research the market to see which ones best fit your needs.
• When negotiating with a dealer, knowledge is power. A little research beforehand can help you determine the right price so you don't end up paying too much.
• Once you've made the decision to buy, don't make the purchase right away. "Sleep on it" to prevent a hasty purchase you may regret later. A good night's sleep can bring much needed clarity to your decision.

Your "credit score" is the numerical value assigned to the information in your credit report. This "score" gives lenders an idea of how big of a credit risk you are. The higher your score, the less likely you are to default or make late payments. Your "credit report" contains detailed information about your credit history. The information comes from various sources including utility companies, lenders, and landlords. If you've ever taken out a loan or had a credit card or utility account in your name, you probably have a credit score. It is based on your personal financial information and can go up or down as your financial situation changes.

Even though no one is ever likely to ask you directly for your score, lenders, employers, landlords, and service providers may routinely reference it as an indication of your creditworthiness. It can determine whether you get approved for a loan, rental lease, or security clearance, as well as the interest rates you pay.

You are entitled, by law, to a free copy of your credit report, once a year, from each of the three credit-reporting agencies: Equifax, Experian, and Transunion. It's a good idea to regularly check your credit report for inaccuracies. Get your free request form at www.annualcreditreport.com.

The credit-reporting agencies that set your credit score use a formula that considers the following five areas of your finances. By avoiding behavior that negatively impacts your score, you can improve it over time.

• Payment History - Paying bills late can have a significant adverse affect on your credit score. Defaulting on a credit balance can be even worse. Always pay your bills on time.
• Length of Credit - The longer that lenders can see you've used credit responsibly, the higher your score is likely to be. Keep older accounts open, even if you no longer use them.
• Percentage of Debt to Available Credit - Using too much of the credit available to you can hurt your score. Try to keep your account balances below 30% of your credit limits.
• New Credit - Opening several new credit accounts in a short amount of time can lower your score. Think twice about opening lines of credit you don't need, even if you're doing so to receive a discount or promotion.
• Your Credit Mix - Using a mix of different types of credit, rather than just one type, can result in a higher credit score. If all your debt is on credit cards, consider refinancing at least some of it with an installment loan.

Find out how to financially prepare for buying a new car or other large purchase:

• Savings Tips from Military Saves
• Your Deployment Plan for Staying Fiscally Fit
• Benefits of Buying a New Car Overseas
• Finding Money to Save

Identify your goal, create a plan, and follow these steps to get the ball rolling:

• If you're thinking about financing, especially for a car or other very large purchase, find out your credit score. This will determine the interest rate you'll be charged and the amount you can finance.
• Write down your goal, including the amount you need to save, and by what date.
• List the steps to accomplish your goal, i.e. review my credit score, open a savings account, set up automatic transfers.

• After 3 months, review your goal and see where you've been successful.
• Are you on track?
• Does your goal still seem realistic and reasonable?
• Did you set your goal too high?
• If you aren't reaching your goal, DON'T GIVE UP! Instead, re-adjust and stay focused.