HARRISBURG, Penn.-Pennsylvania State Employees Credit Union is providing members with their FICO scores on a monthly basis to help them better understand what affects their credit-and better manage their finances-in this tough economy.
The move, which will cost the credit union about $200,000 annually, was made simply to provide members with a much-needed and timely service, explained PSECU CEO Greg Smith.
"It's something members can really use now, and it has a financial literacy element to it," offered Smith. "If members are more aware of what makes up their credit score, and what causes it to move the way it does, they can do things to improve it."
While Smith acknowledged that members better educated on what affects their credit and knowing their current standing might help some avoid slipping down the road to default, he said the CU did not make the move looking for a direct return on its investment.
"We felt that this is something that can benefit members, and that's why credit unions are in business," Smith said. Credit worthiness of the PSECU loan portfolio is good, pointed out Smith, noting the average FICO score of members in its loan portfolio ranges from 720 to 730. However, providing the service allows the CU to easily monitor changes in its members' overall credit score, and if it sees a drop, take action.
The service has appealed to members, with more than 180,000 signing up in the two days following the launch of the promotion in late September. The $3.2-billion PSECU has 350,000 members and Smith estimates that 200,000 are eligible for the program that's only available to those who have online banking and a checking or credit product from the CU.
"They have to have those services with us to allow us to pull their information," said Smith, who explained that PSECU is working with Experian. "We are even turning away members who want the service but don't have the qualifying accounts."
Smith expects the move will attract new members, as well, and drive credit or checking services to existing members. "To get your score from a credit bureau costs you between $6 to $10 a month, and I think many people will see value in our free service," said Smith. "And when members come to us and do not have the qualifying accounts, we ask them why not consider taking a checking account with us."
Members can follow their FICO scores through the CU's online banking interface and see a running 12-month picture. Currently, since the program is new, only one month's score is shown.
PSECU promotes the service to members on its website and in branches saying, "Keep on top of your credit...it's an easy way to monitor your credit health." Advertising also emphasizes that if members experience identity theft, the service allows them to "react quickly."
"This is something we thought members would have an interest in," said Smith. "By the response we've received, we were right."
For info: www.experian.com.
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PSECU, Harrisburg, Penn.
Category: Member Service
Provider: Developed In-House
