BEDFORD, Mass.-Offering free credit score counseling does more than help members become better money managers, it has improved Hanscom FCU's share of wallet.
Hanscom Federal has been offering the free service as a means to strengthen members' financial conditions, but uses the opportunity to look at members' obligations elsewhere and see if business can be brought over to the credit union.
"We can see, for example, if they are paying more than they need to on a loan somewhere else," said HFCU SVP of Strategy and Delivery Scott Post. "We were reviewing the credit of a woman who needed a car loan and we saw she was paying 8.25% on her mortgage. We told her we could bring her mortgage to the credit union and save her $64,000 over the life of the loan. She was so thrilled she was crying when she left our office."
Post said HFCU's mission is to provide members with information to help them make better financial decisions. "To do that it's very crucial members know what their credit looks like. So with their permission we pull their credit report from Experian and sit down with them or talk over the phone. We tell them what their credit score consists of, including credit availability, delinquency, and the mix of credit."
More than 8,000 members used the service over the past year. HFCU sees itself as the "financial gym," but not the "personal trainer," which is why it offers financial counseling services from Balance free to members. "We give them the tools but the credit union does not babysit them," Post said. "Balance coaches and counsels members and helps them create their financial plans."
While many members approach the credit union for the free counseling services, Post said the CU reaches out to members who may be headed for trouble. The credit union monitors account activity looking for ACH transactions from payday lenders or for those having difficulty managing their checking accounts. HFCU recently added a payday loan.
All of Hanscom's efforts to help members manage their money "shows them we are truly interested in their financial well being," offered Post. "If they do come into financial difficulty, we hope they feel a sense of loyalty to us and pay the credit union before other creditors."
The $660-million HFCU hopes to also prevent delinquencies by examining credit report information to find ways to restructure members' debt and improve their cash flow. HFCU's delinquencies, which have risen slightly due to the economy, stood at .77% at press time, Post shared.
