4 Ways Credit Unions Can Use Technology to Boost Members’ Credit Health (2024)

4 Ways Credit Unions Can Use Technology to Boost Members’ Credit Health (1)

When credit unions talk to their members, they likely hear that financial anxiety is a common theme. After all, members are faced with an abundance of stress-inducing factors. High prices for day-to-day expenses. Increased housing costs. Student loan debt. Rising insurance costs. And more. Given these challenges, it is no surprise that many members might be concerned about their credit.

Check out these stats:

  • 77% of consumers feel anxious about their finances¹

  • 45% of consumers worry about managing debt¹

  • 61% of consumers are actively trying to improve their credit score²

Now more than ever, credit unions need to be proactive in helping their members boost their credit education. They need to help members gain the knowledge they need to understand - and in some cases improve - their credit health. And, deliver solutions that can help members better manage their credit. Plus show their members that they can help them achieve their financial goals, while at the same time meet financial commitments.

The key to credit education: Consumer-focused credit solutions baked into your platforms

Consumer-focused credit solutions fueled by technology platforms are a key way that credit unions can deliver credit education to members. Plus empower them to boost their financial wellness. For example, credit unions can enable members to find out their credit score, access credit reports and monitoring, and leverage score-enhancing tools.

Before we dive into these solutions, you might be asking: What might it take for my credit union to integrate these solutions?

Implementation is easier than you might think. One option is to leverage Consumer Engagement APIs from Equifax. With this, credit unions can quickly get up and running to provide members with single and multi-bureau credit monitoring, credit scores, and credit report information. Application Programming Interfaces (APIs) can be integrated directly into your credit union’s customer facing digital platforms including websites and apps.

Another option is to explore our partnership with Array. Innovative technology - fueled by credit data and expertise from Equifax - is integrated into many digital banking platforms that credit unions commonly use. As such, credit education and financial wellness solutions can quickly be incorporated directly into websites and apps.

Regardless of which option you choose, members can sign up for solutions as part of their daily digital banking experience and easily access their chosen solutions on an ongoing basis. Adding consumer-focused credit solutions into your platforms can be a big boost for your digital transformation efforts.

Now let’s circle back - how is your credit union helping members better understand their credit health?

The majority of consumers want their financial providers to help them improve their financial health. But only a small portion - 14% - think they are actually helping.³ And, 41% of consumers lack confidence in their level of financial literacy.⁴ This presents a significant window for credit unions to help fill the knowledge gap.

When it comes to supporting credit health, how would your members rate your credit union?

  • Would your members report that you provide educational information about credit?

  • Would they say you provide actionable tools to help them manage and improve their credit?

  • How would your members compare your financial wellness offerings to those that are typically offered by a large bank?

Here’s how credit unions can empower members to grow their credit education and improve their credit

With the right consumer-focused credit solutions, credit unions can offer their members a seamless way to understand their current credit position. And you can enable them to make decisions that will help them achieve their financial goals. Plus, you can deepen engagement with your members and grow their loyalty. (Tip: Credit unions can also fuel hiring and employee satisfaction by offering credit solutions to employees!) Here are some of these solutions.

1. Offer members access to their credit score and a score tracker

If you asked any of your members if they want to know their credit score, it is likely that almost all of them would say yes. What can you do? Offer members easy access to their credit score within your banking platform. This will provide them with quick insight on their credit position. You can also offer a credit score tracker to help them monitor changes to their score, as well as data on what factors most impact their score.

2. Provide members access to credit reports plus credit report monitoring

Most of your members probably do not check their credit reports as often as what your credit union might recommend. But there is a good chance members might check their report more frequently if they saw that opportunity in your banking platform.

By offering members the option to view their credit report, you can better help your members keep their credit-related records up to date. You can also offer periodic or almost real-time alerts of changes or inquiries to their credit report. Note that inquiry alerts can even include those made by telco and utilities companies. These types of alerts can sometimes indicate potential fraud - which is something that your members will want to know!

3. Empower members with a pathway to improve their credit score

Many members likely want to improve their credit score, but are not sure how. With a digital credit assistant solution (which we call Credit Score Coach), you can provide members with specific, statistically-proven ways that can help them improve their score. For example, the assistant might recommend that a member should:

  • keep utilization below 10% on credit card accounts

  • avoid late payments

  • not open any new lending accounts in the next 12 months.

By following these recommendations, the member’s credit score is likely to improve over time.

4. Deliver members relevant offers based on new credit analytics

Members who sign up for credit services often will come back to your website or app frequently to check their progress. This can lead to a stickier relationship as members will rely on your organization for more than just day-to-day banking needs.

One credit union that launched several credit education tools on its digital platform was pleased to see that over 30% of its members enrolled in the first six months. Among enrolled members with a credit score below 600 that used the credit score enhancement solution, 68% were able to increase their scores. Now that makes for a happy segment of members.

New data gathered from credit solutions can also be helpful in expanding relationships. By leveraging new insights, you can:

  • Better understand your members’ credit positions and interests

  • Deliver appropriate offers and promotions

  • Provide tailored financial advice to help your members improve their credit health.

In fact, consumers who think their financial institution supports their financial health are five times more likely to report interest in purchasing additional products and services3. The above-mentioned credit union was able to achieve over a 10% click-through rate on personalized ads delivered after offering credit education tools to its members. The goal is to deliver the right communications and offers, encourage deeper engagement, and better ensure a long-term relationship.

Knowledge is power. By helping your members grow their credit knowledge, you are supporting their financial literacy, credit health, and financial goals. Learn more about the consumer credit education solutions offered by Equifax and Array. Plus explore the Equifax consumer engagement suite developer portal.

  1. Mind Over Money Survey as reported by CNBC

  2. Equifax Financial Inclusion Survey April 2022

  3. Financial Health Network

  4. Equifax Financial Inclusion Survey April 2021

4 Ways Credit Unions Can Use Technology to Boost Members’ Credit Health (2024)


4 Ways Credit Unions Can Use Technology to Boost Members’ Credit Health? ›

Artificial Intelligence (AI) and machine learning are pivotal in transforming credit union operations. By automating routine tasks, AI-driven technologies streamline processes, reduce operational costs, and allocate resources to more strategic initiatives.

What technology do credit unions use? ›

Artificial Intelligence (AI) and machine learning are pivotal in transforming credit union operations. By automating routine tasks, AI-driven technologies streamline processes, reduce operational costs, and allocate resources to more strategic initiatives.

How do credit unions help your credit? ›

While the individual options may differ from one to the next, most credit unions offer custom loan programs designed to help borrowers establish credit for the first time or rebuild damaged credit. Some credit unions use aptly-named “credit builder loans” that function much like secured credit cards.

What are 3 advantages of using a bank credit union? ›

Pros of credit unions
  • Lower borrowing rates and higher deposit yields. Credit union profits go back to members, who are shareholders. ...
  • Variety of products. ...
  • Insured deposits. ...
  • More personal service. ...
  • Educational resources. ...
  • Member-owned.
May 16, 2024

How do credit unions benefit society? ›

Credit unions provide loans and grants to small businesses and community development projects that may not qualify for traditional bank financing. These loans can help to create jobs, revitalize neighborhoods, and support economic growth in underserved areas.

What credit system do credit unions use? ›

The FICO Score is used by most lenders, and typically ranges from 300 (very poor) to 850 (exceptional).

What are the three top credit unions? ›

Navy Federal Credit Union, State Employees' Credit Union and Pentagon Federal Credit Union are the three largest credit unions by total assets, per the NCUA.

How do credit unions help people reach their financial goals? ›

Credit unions often offer higher-earning interest rates on savings accounts compared to traditional banks, along with lower fees. They also provide various savings tools and resources, such as automatic transfers and budgeting assistance, to help members reach their financial goals more efficiently.

How do credit unions protect your money? ›

All deposits at federally insured credit unions are protected by the National Credit Union Share Insurance Fund, with deposits insured up to at least $250,000 per individual depositor. Credit union members have never lost a penny of insured savings at a federally insured credit union.

Why are credit unions better than banks? ›

Better interest rates: Credit unions typically offer higher interest rates on savings accounts because they have lower overhead costs than banks. Similarly, they offer lower interest rates on loans. Customer service: Credit unions pride themselves on offering better customer service than banks.

What are the pros and cons of using a credit union? ›

Credit Union Pros and Cons. The pros of credit unions include better interest rates than banks, while the cons include fewer branches and ATMs.

What are two advantages to using a credit union over a commercial bank? ›

Credit unions go beyond standard banking, offering lower fees on loans, higher dividend rates on accounts, and more personalized member benefits. Unlike for-profit banks focused on maximizing shareholder profits, credit unions are member-owned, non-profit financial institutions.

What are the main functions of a credit union? ›

What is a Credit Union? A credit union is a not-for-profit financial institution that accepts deposits, make loans, and provides a wide array of other financial services and products.

How does a credit union benefit the local community? ›

From supporting local charities and emergency response teams, uplifting members with messages of hope, being there for essential workers, vulnerable members, small businesses. Behind the scenes, credit unions all around the country are doing whatever they can to help those that need it most.

How do unions benefit society? ›

When working people come together, they make things better for everyone. Joining together in unions enables workers to negotiate for higher wages and benefits and improve conditions in the workplace. There are millions of union members in America from all walks of life.

Why do all consumers benefit from credit unions? ›

Credit unions tend to offer lower fees than banks. This is because of their not-for-profit business structure and their tax-exempt status. Rather than paying shareholders, credit unions are able to reinvest their earnings back into their members, decreasing the need to charge fees such as overdraft penalties.

What are credit unions backed by? ›

The National Credit Union Administration (NCUA) is an independent agency created by the U.S. government to regulate and protect credit unions and their owners. Just like the FDIC, the NCUA insures up to $250,000 to all credit union members and provides protection in the event of a credit union failure.

What type of business model is a credit union? ›

Credit unions are financial organizations that are structured in a cooperative model. Members purchase shares in the organization. The money from the members is pooled together and used to provide financial services to the members.

What type of products and services do credit unions generally offer their customers? ›

Credit unions are not-for-profit financial institutions owned by their members. They provide many of the same products and services as banks including checking and savings accounts as well as various loan products and investment accounts like IRAs.

What are the credit union trends in 2024? ›

For 2024, expect a weaker labor market with an expected 2 million additional jobs being added to the workplace. Credit union membership growth is expected to be 3.3% in 2024 and 2.5% in 2025, below the recent 5-year average of 4.7%, due to a decrease in the demand for credit by the American consumer.

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