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MANCHESTER, N.H.-St. Mary's Bank has introduced two loan products whose primary goal isn't making money for the CU. Instead, the loans help members build and rebuild credit, and the CU establish long-term relationships.

Credit Builder and Credit Builder Plus both charge 7.99% APR. Credit Builder targets youth, and is a $500-maximum loan that rebates all interest if the member makes every payment on time. Credit Builder Plus is for individuals with damaged credit. It is a $5,000-maximum loan that is secured with an interest-earning CD account. Payments are deposited into a standard CD, and accumulated savings are returned to the consumer at the end of the term of the loan. Members choose from any of the credit union's standard CDs to match the term of the loan.

Credit Builder's terms extend to two years, and Marketing Director Elizabeth Stodolski sees the product as an investment in young members. "We are helping them get a start and we hope they will continue to choose St. Mary's Bank for their financial needs as they move through life. We want to make sure they build solid financial skills and a credit score. So they don't get into the habit of running up credit card bills and borrowing money, but really get into the habit of saving and preparing."

Waiving interest is done to motivate young members to make on-time payments. "Instead of just telling them they are building their credit score, we wanted to give them an incentive that would produce desired behaviors," she said.

St. Mary's expects many college students will use Credit Builder. It's too soon to gauge results, but Stodolski said that three CU employees, all college students, took out the loan the first day it was offered.

Credit Builder Plus targets members who have encountered financial trouble. Not only does the loan help members re-establish credit, it's also forced savings, explained Tom Champagne, director of community outreach. "Members receive two benefits. The payments they make get reported to the credit bureau and they are saving for the future."

Champagne said the CU does not expect Credit Builder Plus loans to be for large amounts-$1,000 is the average loan members are taking. Terms are 12 to 48 months.

St. Mary's Bank, the nation's first and oldest credit union, has yet to advertise the products heavily. It will soon promote the loans though its newsletter and website, and at local colleges.

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