Credit Unions

matteus

I opened an account with the credit union at work in March of this year. I was told that if I saved with them for three months I was entitled to a loan.
So after three months I applied for £8000 loan. At first they refused because I failed to meet their criteria on the credit check, then after appealing they only paid out £6400, telling me to apply for the rest in October this year.
So, October comes and I apply for the remaining balance only to be refused again telling me I was a risk and was told they can't offer me anymore services at this time.
This surprised me as they added they weren't risking other members money on people like myself. Er, hang on! That includes my money also, plus I don't see where I am a risk as my monthly payment comes direct out of my wages. So its not like I'm ever going to miss a payment.

But is it normal practice for Credit Unions to perform a credit check? I was under the impression the whole point of their existence was to help people like myself who have been put in these awkward positions.

Ames

I think 'normal' credit unions do because the underwriters insist on it. I enquired about applying for a current account and was told there'd be a credit check so didn't bother. I don't know about loans though because I use mine just for emergency savings.

No idea about ones connected to works though.

Rafter

Ultimately credit unions can only afford to lend what is saved with them so expecting an £8,000 loan after 3 months is a bit optimistic. The are normally focused on smaller loans to avoid people going to loan sharks or doorstep lenders too.

It is also quite right that they should credit check you. A number of credit unions go bust each year (bailed out by the FSCS) because they make bad lending decisions and I'm sure you wouldn't want your savings being lend out willy nilly without checking that the loan recipient has the ability to pay.

R.

CHR15

I wonder how much the OP actually saved with themfor 3 Months!!

sounds like a minimal token payment in order to qualify for a loan.

The more people do that, the quicker the demise of the fantastic facility the Credit Unions can offer.

iolanthe07

£8000 is outside the parameters for many credit unions anyway. They are there to provide small loans for people with limited incomes and, ideally, who save for a lot longer than three months before they ask for a loan!