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Build Your Credit by joining a credit union

By Ruth Racey
Published: Monday, October 12th, 2009

Like banks credit unions offer loans. But unlike banks credit unions offer loans to members only. This is the right place for people whose credit scores have gone bad. Credit unions grant loans at much lower interest rate than banks. This is because they are non-profit and established primarily to serve members. They are also run by the members themselves, often on a voluntary basis, which means that the cost of managing the offices is not so large. A loan application submitted to banks from someone with poor credit score will probably be rejected outright. Not so with credit unions. People can explain their circumstances and have a fighting chance.

Credit unions offer a lot more services than banks. Banks charge high interest rates on loans while giving low interests on savings deposits. The opposite is true with credit unions. Loans interests are lower and deposits bring higher dividends. In addition, accumulated earnings of credit unions go to the members themselves in the form of increased services.

You have to be a member, however, in order to avail of credit unions’ services. Becoming a member should not be very difficult. There seems to be a credit union almost everywhere. You can ask somebody, your employer will probably know, which credit union operates in your place of employment or residence. Your organization may even have some dealings with them. Your co-employees may be members of credit unions already and can offer you some vital information. A member of the family or a friend may know something about credit unions. It is advisable to ask them also.

Membership in a credit union or any financial institution is an excellent way of restoring your credit score to respectability or building a decent one. Being a member, it will easy for you to take out a loan and since the terms are lenient, you should not find it difficult managing payments. Little by little, as long as you regularly pay your obligations, your credit score will become better. There is no other financial organization will give that much consideration.

Aside from giving the chance to improve your credit score, there is still another thing in credit unions that you will surely appreciate and be comfortable with. Unlike banks it offers an atmosphere that is friendlier and more welcoming which should not be surprising manned as they are by volunteers from the community who work not for money but for the chance of providing services to fellow members. Credit unions regard their work as community service and encourage as many people as possible to join their ranks.

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