f4g5thyhjghftSome people find themselves at a crossroad on whether to choose a credit union or a bank when looking for a loan. The truth is that credit unions have several benefits over banks. This has made many people prefer credit unions than banks. Most of the banks are established institutions that have been doing business for many years and therefore fluctuating market conditions do not threaten them. Credit unions are capitalizing on this by providing incentives to attract customers and also customize their services to meet unique customer needs. If you have been pondering on what to choose between a credit union and bank, the benefits below will make you go for a credit union.

Significant benefits of credit union

Customers are members or stakeholders

This is the greatest benefit of a credit union like the federal credit union because customers are owners of the union and therefore they make decisions that benefit them all. With banks, the management usually aims at making decisions that benefit shareholders only without considering the impact on customers. When you join a credit union, you become a stakeholder, owner or member and customer at the same time.

It is a non-profit institution

A credit union is a non-profit organization hence all profits made are shared among its members or customers. It is important to note that being non-profit does not mean the union makes no profit; it means that it does not have to work under pressure and use all means possible, including exploiting money from customers, so as to earn profits. Also, the union is exempted from federal tax thus saves this expense to increase its revenue.

Lower interest rates and higher saving rates

wef4regtygrtA credit union offers lower interest rates on loan accounts and greater rates on savings accounts. This is exactly what every customer wants. Thus with a  credit union, you will pay less when borrowing and get more returns when saving than when doing this with a bank. The union is also insured just like banks.

It is friendlier and more accessible

Credit unions are created to serve local people. These unions usually adopt an open door policy making it easier for anyone to access their services and seek personal support. The unions are very connected to the local residents and managers always use a friendly tone in a welcoming atmosphere that make customers feel appreciated. The unions also focus on educating and enriching the community financially by offering free educational services, seminars or classes.

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When you're working to get a better credit score, there are a few actions to take. These steps will help you show credit responsibility to future lenders.

Pay Your Current Bills On Time

Just by paying your current monthly bills on time every month you'll begin to create a trail of positive payment history on all 3 of your credit reports.

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For example an unsecured credit card. The idea is to have a payment that will report every month to all 3 of the credit bureaus, this way by making your on time payments every month you will also improve your payment history.

Settle Outstanding Debts

Use caution as this can be a treacherous path. You need to offer a settlement agreement in exchange have the debt collector stop reporting your account to all three bureaus. Additionally, you should never pay the full balance due.

Often collection agencies will buy your debt for just pennies on the dollar. It is reported that one popular collection agency based in southern Arizona was buying accounts for $0.025 on the dollar. So this collection agency could have been contacting you about paying off a $2000 debt, but they had purchased this account for only $50!

Check Your Credit

By law, you are given one copy of your credit report every year from all three major credit bureaus. It is incredibly important to make sure and check your report on a regular basis. Experts estimate that up to 25% of all credit reports have an error on them.

Dispute Your Credit

b jjnjknuIf you have an error on your credit report or have a negative item such as a collection, medical bill, charge off. You can challenge this item and possibly have it removed immediately.

When the bureau gets your dispute, they will investigate the issue by contacting the lender. They'll ask the bank to verify the account, the balance due, and the dates. According to the Fair Credit Reporting Act the same law Congress passed that gives you a free copy of your credit report also enables you to dispute any item on your credit report that you believe is inaccurate.

It is estimated that 3 out of every four bureau investigations result in the removal of an item from the credit report. This is typically a result of the lender no longer holding legal collection rights to the debt account and therefore being unwilling to spend the time or person-hours necessary to verify an account and the details of a bureau investigation.