Why do I Care About Credit Unions?
One of the most important part of rebuilding your credit is establishing new credit. An excellent source of easy credit is the credit union. They have more lenient credit guidelines on auto loans, credit cards and second mortgages. However, most people don't know which credit unions they are qualified to join. Here are some tips.
How to Find a Credit Union
The good news: If you want to be a member of a credit
union, you probably can. The bad news: They rarely
advertise, so if you want a credit union, you'll most likely
have to do a little legwork on your own... but the rewards will likely be
worth the effort!
A credit union is a cooperative financial institution, not-for-profit,
owned and controlled by its members. A credit
union's charter defines its "field of membership,"
which could be an employer, a geographic region, school, religious
or professional affiliation, or community. Anyone working for an employer that
sponsors a credit union, for example, is eligible to
join that credit union.
Whether you choose to entrust your hard-earned money to a bank or a credit
union, you will want to make sure that it is federally
insured. Where a bank might sport the FDIC logo, in a credit
union you want to look for the insignia of the National Credit Union Administration (NCUA).
The National Credit Union Administration regulates
federal credit unions and insures the vast majority of
all credit unions in the United States. Its insurance
fund guarantees deposits up to $100,000, just like a bank.
What are the Advantages of a Credit Union?
Becoming a member of a credit union is advantageous
because credit unions are non-profit, and exist to
provide members with a place to save money. Credit unions typically have
lower costs associated with all of their products and services.
Credit unions were created to enable people to pool
their financial resources to help themselves and each
other, working together as a team to create solutions
to meet their financial needs. When you compare credit union
information to that of a traditional bank, you'll find
lower interest rates when borrowing and higher
percentage rates in savings as a credit union member.
Because they are not-for-profit institutions, credit unions
offer better rates on credit cards, sometimes up to three
percentage points lower than the average bank card
rate. Typically, they are more forgiving regarding creditand
may even allow people with past bankruptcies to qualify for unsecured cards.
Credit unions are an especially good option for
people who are building credit for the first time or
trying to re-establish good credit, as they are typically smaller
organizations which offer personalized service and are more willing to consider
factors beyond the "black and white".
Financial education is available to all members.
Credit unions assist members in becoming
better-educated consumers of financial services.
Your credit union can put you in business with a
small business loan. And some credit unions have
established a relationship with the Small Business
Administration (SBA) to expedite loans to
credit-worthy small businesses.
Credit unions are governed through an unpaid,
volunteer Board of Directors, democratically elected
by the credit union membership.
Finding a Credit Union
Governmental regulatory agencies require that credit
unions restrict their membership to defined segments
of the population, such as people who live, work,
worship, or attend school in a well-defined geographic
area; employees of specific companies or trades;
members of specific non-profit groups (alumni
associations, conservation or other advocacy
organizations, lodges, churches, or the like); or a
particular occupational group (teachers, doctors,
etc.) In the United States, this is referred to as a credit
union's "field of membership."
There is a credit union for everyone - some of us may have to find more creative ways
to "stretch" the definition of qualification to be a member, but it can be done! In addition
to the ideas given in the previous paragraph, here are
some more tips for seeking a credit union that you may qualify for:
- Ask your employer. Your company may sponsor a credit
union, or may be a select employee group (SEG) that
has access to a credit union.
- Ask at your school, your childs school, your church.
- Ask your family. If your employer doesn't sponsor a
credit union, perhaps your spouse's or another family
member's employer does. Many credit unions will allow
family members to join.
- Check the yellow pages. You will find a listing of
credit unions in your community. Give them a call.
- Consider civic and social groups. Many associations and organizations offer credit union
membership to their members. These include Homeowners’
Associations, Scouting organizations, and more.
- Quiz the neighbors. Some credit unions have a
"community" field of membership, serving a region
defined by geography rather than by employment or some
other association. Ask friends in the community if
they know of a credit union you may join.
- You are active duty military, retired or a military dependent,
or are a civil service or contract employee or retiree.
- Go online and check the (many) online databases and credit union "locator" tools for credit unions. We have provided a number
of links below that you can utilize.
- Call the Credit Union National Association
by calling (800)358-5710. You'll hear an electronic message that
includes the name and telephone number of a person at
the credit union league in your state who can help you
find a credit union to join.
The National Credit Union Administration's consumer assistance center will help
you with a list of credit unions in your area.
Links for Further Information on Finding a Credit Union for You:
Several additional credit union locator tools that may be helpful in
assisting you in determining which credit unions might be
right for you: www.findacreditunion.com
and http://www.creditunion.coop/cu_locator/quickfind.php
Financial Data on individual credit unions can be found at
http://www.ncua.gov/ConsumerInformation/index.htm and their credit union
finder tool is located at http://www.ncua.gov/indexdata.html.
For a good comparison tool for credit unions versus banks, go to Bankrate.com to compare percentage rates directly.
http://creditunionaccess.com/
Do you have a question you feel we haven't answered?
For a small fee, you can talk to a counselor on the phone or Buy the Book!
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