Looking for a new car? Start with a credit counselor
Perhaps you’re hearing that dreaded clunk, clunk noise or maybe you’re tired of driving a vehicle that gets less than 20 miles per gallon or simply want to drive something that doesn’t make people laugh when you pull up and park.
Of course you’ll spend a few weeks looking at cars, comparing models, checking out different features and sizing up the roominess of the back seat. Now is also a good time to start thinking about financing.
Then again, maybe it’s the financing portion of the new car process that keeps you in your clunker. If money is already tight every month and you’ve been too afraid to begin the process of looking at cars for fear of not qualifying for a car loan or getting a loan that will be to difficult to manage on top of other bills, the solution may lie with good credit counseling.
Sandra McClinton, director of lending, Western Rockies Federal Credit Union (WRFCU) is also a certified credit counselor through the Credit Union National Administration, and it’s her mission to not only help people with car loans, but to also help members look at their entire financial picture. She and any of the other loan officers at WRFCU can help members with budgeting, loans and consolidation.
“Credit counseling is most often associated with those on the verge of bankruptcy, but it’s also for those who are feeling the first squeeze of financial pressure,” McClinton said.
While loan officers are happy to talk to members and non-members about loans and general information, they can only pull credit reports and talk in-depth numbers with members.
Don’t worry. Membership is free; a person need only deposit $25 into a savings account (which remains that person’s money) in order to become a member.
The first step to getting your financial house in order is to track expenses and develop a budget. Then it’s time to look up credit scores and look at all bills and loans. Here’s where a credit counselor is invaluable, especially if you have unsecured loans, like credit card debt or student loans.
Cherie Martinez, a loan officer with WRFCU, was recently able to help a member pay off her credit card, which had an interest rate of 29 percent, and roll the outstanding balance into a new loan, which used her vehicle as collateral. Because the new loan was a car loan, rather than an unsecured credit card balance, the interest rate was 6 percent and the member will save $250 every month.
“We saved them money and we educated them on using credit cards,” McClinton said. “Our job is to put members in a better financial position.”
For many members, that better position is the front seat of a better car than the one they currently drive. No matter what your financial situation is, it doesn’t hurt to go talk to a credit counselor at WRFCU. Even if you can’t qualify for a car loan today, the counselor may be able to suggest specific steps and actions to take to improve both your credit score and your monthly budget to enable you to buy a different car sooner than you thought possible.