While the amount of money a member spends or saves each month is a personal decision, it is important to know where the money goes. Setting a budget can help prepare for unexpected expenses and plan for the future. Saving with payroll deduction can help save for a future goal such as a down payment on a home, college education or emergencies. If a person finds it difficult to save each month and sees that it takes all earnings just to get through the month, then additional debt is usually not the answer. Restructuring or consolidating existing debt may be an alternative to make the debts more affordable.
Credit history provides an insight into a member's willingness to repay obligations.
A credit report is obtained on all members requesting a loan for the first time. In addition, an updated credit report is obtained annually when additional funds are requested. A credit report that reflects delinquent payments, judgments, unpaid collections, or bankruptcy may hinder a member's ability to borrow money. Filing bankruptcy usually prevents a member from borrowing additional money and if the Credit Union has incurred a loss resulting from the bankruptcy, then a loan would not be approved under any circumstances. If a credit report indicates bad credit, it is possible that the Credit Union could make a loan to help a member improve the credit report.