When it comes to establishing or repairing credit, one of the first things you’ll need is a checking or savings account. If you can join a credit union, that’s even better. Credit unions are member-owned banks (sort of like a banking co-op) that tend to offer better perks than a large corporately owned bank. Furthermore, since they’re owned by members and not stockholders, customer service tends to be better and more personal.
Credit unions are not-for-profit, which means service will always take a higher priority than bottom line, because there are no profit margins to worry about and no stockholders to whom they must answer. Joining a credit union can do wonders for your credit. Here’s why:
Credit unions genuinely want to help you
Since credit unions are member owned, it’s beneficial to them if their members have good credit across the board. It’s for this same reason that it’s a better banking situation for those who are working on credit repair than a traditional bank. When credit union members have better credit scores across the board, not only does it help lower fees for everyone, but it also helps better the community in which the credit union is located.
Credit unions have lower fees
Since credit unions aren’t trying to appease stockholders or increase profit margins, fees and interest rates tend to be considerably lower for members. For those who are working to build or repair credit, every penny matters, so lower fees and interest rates are especially beneficial in such instances. If you’re looking for a small auto loan, secure credit card, or other credit building tool, you may want to consider joining a credit union.
You might be able to get a small loan from them
Credit unions are more likely to work with a member on a small loan, even if that member has a poor credit rating. These are usually referred to as “credit builder loans” and can really help those with bad or no credit get a leg up on building their credit. They also have other offerings designed to help members improve their credit, so it’s worth your time to do the research and find a credit union that you can qualify for.
How to join a credit union
The one drawback of a credit union is that they have specific rules about who can join. Many credit unions exist to cater to a specific demographic (such as Naval Credit Union, which serves military members and their families). Credit unions may also accept members based on where they live or work, where they went to college, or for many other reasons. Many people might think it’s difficult to join a credit union because of their strict eligibility rules, but there’s a credit union out there for everyone. You may even be able to join one based on your religious affiliation, as many churches have started credit unions to help their parishioners.
If you’re concerned about your credit, contact Lexington Law for a free consultation.