Why won't my Credit Union give me a loan?

Question

Hi there. I have been a member of my CU for 5 years. I have never had any sort of overdraft fees, and usually have at least a few hundred bucks in my account. I have a steady job (4 years) . I have lived in the same place for 6 years, never ever been a day late with rent. I owe nobody anything and therefore my credit is non-existent. So a few months ago a bit of an issue shows up, my car breaks and I obviously need another, but this time I did not have enough savings to buy one, and the one I had was beyond repair. So I go to the CU and apply for a loan. The next day I am told that they would give me one, BUT I need someone to co-sign for me (with good credit) . I have no family, and the few friends I have all looked the other way when I asked them to do this favor for me (I was hurt by them doing this as I had helped each one out numerous times in the past when they needed money; somewhere to stay; etc.... but it is their choice and I understand that)

...Any way so I tell this loan officer lady (who clearly seems bored by my presence) about my predicament. She gives me a sympathetic smile but says that it is their policy and clearly she won't bend the rules, regardless of me being a good candidate. I tell her ok, how can I then build my credit? How about you give me that loan and we take it from there (by the way it was not even much, like$4000) she says no.

So out of neccesity I had to go to 4 different cash advance places and get 4 loans and use the bit of savings I had, to buy a car. And guess what , even though the interest was insanely high, I was able to pay them all off in a couple of months, but why did I have to go through all that hell. I initially went to a credit Union with the understanding that they were friendlier than big banks. That I was part of them etc. So why are they so difficult with me?

Lastly, I wrote a letter to the CU president explaining all this to him as well, he said in response that he'd have them look into my case again. I got a call from the same loan officer who told me the same story again... I did get a secured credit card a few months ago, from Wells Fargo.

Answer 1

Shocking! What sort of customer service do they give at the Credit Union you are with, clearly, NONE! Here is an idea...close the account for starters, tell them to go f*** themselves. Unfortunately, in order to get credit, quite often you need to have a credit rating, but that doesn't mean that all banks and building societies work on the same principle. Go and find yourself a bank or finance company that will gladly oblige, show them your records of saving and any other documentation that will 'compliment' your application for a loan, even if it's paying rent and/or bills on time...that will really be a big bonus for you! Shop around, it's the only way to go and I'm sure you will eventually find a bank/credit union or finance company that will see that you are not a bad risk and happily give you a loan. go with the good service! good luck!

Answer 2

It seems like the strict criteria for getting a loan has spilled into CU. Banks and Credit Unions are getting down right paranoid when lending money now because they have to be sure you pay. The 5 yrs you were with them and everything else seems fine, but I bet they were looking at your assets with them and they wanted to make sure you would be able to pay this loan back, hence they want a co signer. Now, even though you have helped your friends with certain things I respect and admire that, but the thing is when you co sign and the person is not able to pay, that co signer is liable for every penny. I speak from personal experience as I have co signed and the person I have helped is falling on hard times. At the moment it is still being paid, but when he cant pay anymore, guess who has to? ME because I cosigned, but your friends should have been there in some sort of capacity to provide support

Answer 3

Apparently, your credit union is one of these lending institutions who will lend you all kinds of money when you don't need it. Advice; find one that will. Take out a small loan , for no reason at all.Pay it back before the due date. Do it again with some other C.U.and do the same thing. One of your biggest assets today is a good credit rating. Open a couple of charge accounts at retail or department stores like Sears, Target, Dillards.Charge a purchase and pay before due date. Each should give you a credit application. Also consider opening a charge card account like Visa or Mastercharge.

Answer 4

I would call them and ask why they need a co-signer. My guess is that you have been smart, perhaps too smart, and have paid cash for everything and as a result have not established enough of a credit rating. Since you are known to them, perhaps talking to a loan officer might get them to change their mind because of your record with your accounts there. It cannot hurt your case.

Answer 5

I would change credit unions. Go to omni american.

Answer 6

http://articles.moneycentral.msn.com/CollegeAndFamily/MoneyInYour20s/9waysToBuildAKillerCreditScore.aspx