Do Credit Unions Check Your Credit Score?

Do Credit Unions Check Your Credit Score?

If you’re joining a credit union for the first time, you may have questions about the steps involved. One common question is whether credit unions check an applicant’s credit when reviewing their membership application.

Credit Unions may check your credit when you apply to join. However, your score won’t necessarily determine whether you’ll be approved for membership. Instead, it may dictate which services you’re eligible for.  In addition, if you wish to apply for a credit card or car loan when submitting your credit union membership application, your credit report and score will be one of the factors used to determine whether you’ll be approved to take out a loan.

Read on to learn about what credit is and why credit unions may need this information.

What is Credit?

do credit unions check your credit score

A credit score is not the same as a credit report. They are related, though. The information contained in your credit report is used to calculate your credit score.

Your credit score typically reflects how well you manage and repay your debt. It’s a three-digit number based on an algorithm that analyzes whether you’re a good risk for lending money. The higher your number, the less of a risk you are to a potential lender. Your score is based on several factors, such as your payment history, amount owed, length of credit history, credit mix, and any new credit. It will typically range from 300 to 850.

A credit report contains details of an individual’s credit history. There are three major credit reporting agencies that provide this information in a report that typically contains personal information, account information/trade lines, public records, and inquiries. When your credit report is checked, or “pulled,” the inquiry is categorized as either a hard or soft pull. A hard pull generally means a lender is looking at the report to make a lending decision. While a hard pull can affect your credit score, the impact can vary based upon each consumer’s particular situation. A soft pull is done not to make a lending decision, but instead as part of a background check, for example. Soft pulls have no effect on your credit score.

Does PSECU Check Credit?

When you apply for membership at PSECU, we run a hard pull on your credit . We won’t necessarily make a decision on your ability to join based on your credit score. However, it can impact which products and services you’re eligible to use.

At PSECU, we have a membership application that allows prospective members to apply for both membership and a loan at the same time. Whenever you apply for a loan, we also check your credit. However, your credit will not determine the interest rate on your loan because PSECU doesn’t practice risk-based lending. Keep in mind that if you apply for both membership and a loan at the same time and are not approved for the loan, you may still be able to become a member.

How Can You Improve Your Credit Before Applying for Credit Union Membership or a Loan?

You can take a number of steps to help improve your credit. We offer a variety of free educational resources you can take advantage of to get on track. It may take some planning and time, but the improvements you make to manage your money successfully will be worthwhile and may even save you money in the future. In addition to creating a budget to help you better manage your finances, start now by doing the following:

  • Pay your bills on time
  • Get current with outstanding debt
  • Pay off debt
  • Refrain from opening new lines of credit
  • Maintain (do not close) any current lines of credit
  • Periodically check your credit report for potential inaccuracies and unauthorized activity

Learn More About Credit

Interested in learning more about credit? Check out our WalletWorks page for more resources on building credit, credit myths, and components of a credit score.

The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal or other professional if you have questions.