Member Owned Credit Unions Help Fill The Credit Repair Void
After the financial crisis kicked off in 2008, individual credit scores across the country began plummeting. Nearly six years later many are still in recovery mode. In order to help consumers reestablish their credit rating, credit unions are offering assistance in the form of free credit counseling, online debt management classes, and low-cost secured loans. Credit unions are different from traditional banks in several ways, but one of the key differences is that credit unions are owned by their members. As such, they are much more willing, and even motivated, to help those members rebuild their credit and achieve higher scores.
There are four primary ways in which credit unions can help their members restore their credit scores:
The first is with credit builder loans. These are small loans with reasonable repayment terms that help members reestablish their credit over the course of time. Between 2009 and 2012 the number of credit unions offering these kinds of loans increased to nearly 1,200 nationwide.
The second way is with free credit counseling. The goal of credit union credit counseling is to offer credit consultation that is aimed at improving individual credit scores as opposed to charging exorbitant fees for such services which obviously can be counterproductive.
The third is through online credit-building tools such as helpful information on credit repair blogs and downloadable e-books that cover essential steps to credit rebuilding.
The fourth method involves secured credit cards. These are credit cards ideally suited to individuals with little or no credit history. Savings accounts are used as collateral against a credit card loan which allows the cardholder to build credit and, subsequently, buying power as he or she makes deposits into the account.
For more information about credit unions and their capacity for helping rebuild personal credit, click here to visit Fox Business.
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