My team of consultants work with hundreds of credit unions each year, and we are constantly noticing new trends. In recent years, we are seeing more and more credit unions proactively taking steps to help members improve their credit score.
You say, “Rex, that’s not a new thing, that’s been going on for years.” True, but not at the level we’re seeing it now. In the past we’ve seen things like credit counseling, credit-builder loans, etc to help those with poor credit improve their scores. Now it seems like everyone wants to enhance their score – even the 700+ members.
With more members interested in improving their score, this is one of the things we teach credit unions at our University of Lending classes. When I re-wrote the manual for our classes this year, we included an entire section on this important topic. I’d like to share a few of the basics with you here today. So what does it take to move a 700 score into the 800’s?
Scores 800 or Higher
What do they have in common?
1. No public records
2. No bankruptcy in the last 10 years
3. No collection accounts
4. No charge offs
5. No current delinquency
6. No past delinquency
7. Credit history of seven years or more
8. Homeowners for seven years or more
9. Revolving debt (credit cards) 95% available
10. Inquiries are less than three over the last 12 months
11. Unsecured debt of $5000 or less
12. Oldest trade line is at least seven years old.
How can you use this information? Knowing what it takes to score 800 plus will show you what’s keeping your member in the 700’s. We should all want our members to get our very best rates, and helping your members attain their best score will help them achieve this goal. After all, isn’t that what credit unions are all about?
Almost all of the major credit card providers are offering some type of credit monitoring or FICO score service nowadays. So members, and the general population, are more aware than ever about their score. However, they still need someone like you to help guide them and truly understand their score. To enable credit unions to help their members we included many tools in our new manual. One of which is featured on the next page, titled “What Road to Choose”. This document gives credit unions a quick cheat sheet when counseling their members. I hope you’ll take a minute to check out this quick tool, and if have any feedback, we’d love to hear from you. Drop us a note to UofL@RexCUadvice.com. Even though times change, credit unions will always be about helping people.
Rex Johnson (1944 -2020) was the widely recognized leader of credit union Lending. For more than 40 years, Rex brought his unique brand of leadership and passion to the credit union industry, sharing his lending knowledge with thousands of credit unions along the way.
Rex Johnson founded Baxter Credit Union (BCU) in 1981 and under his leadership, grew membership to 72,000 and assets to over $300 million. Johnson started Lending Solutions, Inc. (LSI) in 1994 and LSCI in 2000. He authored four best-selling books and lending videos and was elected into the Illinois Credit Union Hall of Fame and CUES Hall of Fame in 2000. In 2017 Rex received CUNA’s prestigious Phil Greer Lifetime Achievement Award.