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Credit repair: big banks vs. credit unions

When recovering from bad credit after bankruptcy, it is important to know how big banks and credit unions handle credit repair. Only after educating yourself can you confidently choose an establishment to help you mend your credit score.

Choosing an institution in Virginia that offers good interest rates, even to someone with damaged credit, is important when trying to improve your credit score. Lenders look at credit history when determining interest rates, but that is not always the only number they look at.

The problem that many people have is that, when they deal with a big bank, they feel like they are their credit score, not a person. Unlike big banks, which have policies in place that keep individual bankers from making subjective decisions, a credit union's staff will have more flexibility in making lending decisions. That way, a person's history can be looked at subjectively, and there is a higher probability of being given a second chance.

Big banks are more rigid and usually process credit applications based solely on credit scores. Again, that changes a person into a number with no leeway. A credit union, on the other hand, will often look at how long the customer has been banking with them, their payment history and the types of accounts the customer has.

Secured credit building loans and credit cards are available from both institutions. Being secured, the loan is only for as much as you already have in your account. They make the loan, you pay it back. It is quick and easy. At a big bank, the minimum is typically $1,000, and at a credit union it can be as low as $250. A lower loan means an easier-to-pay-back loan.

Overall, for a person looking for credit repair, a local credit union will probably offer better options.

Source: Examiner.com, "Credit Repair with Big Banks or Credit Unions?" Garr Russell, Nov. 15 2011

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