Most credit unions in the United States don’t require a healthy credit score for enrollment. Credit checks are instead performed to ensure a potential member will not cause problems for the institution, i.e. credit fraud. Nonetheless, a high credit score will better serve the member of the institution rather than the institution itself. Falling behind on car payments, rent or student loans can affect your score if the payment is more than 30 days late or longer depending on which institution you owe. Why should you keep your score high? The following reasons could very well convince you to.
These days, almost all businesses and/or corporations perform criminal background checks on interviewees to ensure that they aren’t hiring a criminal (if the job requires having a clean record). Some also perform credit checks. Why? The reason varies by industry. You can bet that a banking or credit institution will perform one to make sure whoever they’re considering to fill a position is not at risk of committing fraud. They also look to see how responsible you are with your money by viewing your payment history. A low score may be seen as you having trouble keeping up with payments, thus, appearing as a risk for the company as an employee.
Starting A Business Or Buying A Home/Car
Let’s say a recently married couple plans to purchase their first home but are turned down by their bank when attempting to apply for a loan. The bank informs them that both of their credit scores are so low that the institution can’t risk doing business with them due to their questionable money-handling skills. The same can happen for someone starting a business or purchasing a vehicle. The institution surely will not risk their money on someone who may have trouble repaying it.
If you’re planning on attending college courses, your first step would be seeking financial assistance if no other option to pay for school exists. Federal student loans (Stafford or Perkins) don’t require credit score checks in order to take a loan out with them. Doing business with a private loan company is a different story. Depending on the level of your score determines how much interest will be paid over the years following your graduation. If the score is severely low, the provider may deny your request for a loan all together.
Insurance premiums are determined by an applicant’s credit history in most states. It’s possible that your low credit score may result in an insurance risk. A high score typically correlates with a lower premium price and vice versa.
If you’re interested in leaving your banking institution to join a trusted credit union, contact the Valley Federal Credit Union main branch at 956.546.3108 or any of our other locations near you.