OnPath Credit Union

Whether for good or ill, every consumer has a credit score. It’s an inescapable figure that follows you wherever you go, and there’s no switch you can flip to turn it off, on or reset it. You'll often find your credit score quietly influencing opportunities, dictating terms and either opening or limiting access to various financial products.

Home Loans

A good credit score is the linchpin in not only securing a mortgage but also procuring favorable terms.

• Interest Rates: A higher credit score can potentially unlock lower interest rates, translating to thousands saved over the life of the mortgage.
• Loan Amount and Type: Your credit score can dictate the maximum loan amount and the type of home loans available to you.
• Approval Odds: The likelihood of loan approval increases with the strength of your credit score.

Auto Loans

Most New Orleans residents don’t have tens of thousands of dollars in cash on hand for a new vehicle purchase. Unfortunately, your current liquidity has no impact on the potential for car breakdowns, high repair costs or accidents, all of which could force you into auto shopping. Auto loans are essential financing tools for many people, but they inevitably require a credit score check.

• Negotiation Leverage: A stellar credit score gives you leverage when negotiating interest rates. Having strong credit could also make you eligible to use one of a variety of lenders, some of which might offer better terms or rates than others.
• Loan Terms: Your credit score influences the duration and terms of your auto loan, impacting monthly payments and overall cost of your vehicle purchase.

Credit Cards

From the shopping mall to the online store, your credit card is likely a constant companion. Many people rely on credit cards for everyday purchases and paying bills, fully replacing cash, checks or debit cards. While a credit score won’t have much of an effect once you have a credit card, it can have a dramatic influence on your search for a new one:

• Approval and Limits: Your credit score is pivotal in determining whether you get approved for a credit card and the accompanying credit limit.
• Interest Rates and Rewards: Cards with lower interest rates or lucrative reward systems often require higher credit scores.

Personal Loans

Secured loans and unsecured loans offer different risk profiles to lenders. With a secured loan, the lender knows that if you default, they can repossess the collateral to recoup their losses. With an unsecured personal loan, they have less recourse if the borrower fails to repay their debt. Unsurprisingly, your credit score is particularly important when you apply for unsecured personal loans that aren’t secured by a car, home or other collateral.

• Accessibility: A healthy credit score ensures access to personal loans when needed, including unsecured personal loans.
• Affordability: Enjoy reduced interest rates and potentially lower fees with a strong credit score.

Debt Consolidation Products

Being trapped under multiple high-interest debts can feel suffocating. The inescapable reality is that those debts are likely damaging your credit score, but you might assume a bad credit score makes it impossible to get out from under them. This isn’t necessarily true. While having a good credit score could result in better terms on debt consolidation loans, these borrowing products were designed specifically for people who might be struggling with poor credit. You may still qualify for rates and terms that are better than what you’re currently paying on high-interest debts.

• Qualification: A credible credit score may be necessary to qualify for certain debt consolidation products. However, a perfect credit score usually isn’t necessary to find competitive debt consolidation products.
• Interest Rates: Lower interest rates on consolidation loans or lines of credit are often reserved for those with higher scores.
• Loan Amount: Your score can influence the maximum amount that can be borrowed to consolidate existing debts.

Don’t get too discouraged if your credit score needs work. OnPath Federal Credit Union can likely work with you to ensure you get the funds you need at rates you can live with.

Insurance Premiums

Insurance companies may take your credit score into account when determining premiums for certain types of insurance, including auto, renters or homeowners insurance.

• Premium Rates: A higher credit score might equate to lower premiums. Louisiana is not one of the six states that prohibit the use of credit-based insurance scores in the premium calculation. If you’re a New Orleans resident, your credit will likely play a role in your premiums.

Rental Opportunities

Venturing into the rental market, your credit score often precedes your reputation.

• Approval: Landlords may evaluate your credit score as a measure of financial reliability.
• Security Deposit: A higher score might lower the requisite security deposit.

Employment Opportunities

Your credit score won’t influence most job opportunities, but there are certain industries in which your credit score may prevent you from being hired or will hinder advancement. 

• Hiring Decisions: Certain employers regard a sound credit score as indicative of responsibility and integrity.
• Risk of Being Compromised: In national security or law enforcement roles, debt problems might be seen as a potential security risk that makes employees more susceptible to bribes or blackmail. Some jobs in the financial sector may also do credit checks due to concerns that indebted employees with access to significant liquid funds or client assets might be tempted to steal.

Your Credit Score Isn’t Set in Stone

Having a less than perfect credit score doesn’t have to be a permanent problem. There are multiple avenues for pursuing credit score improvements, from debt consolidation loans to credit counseling and financial education – all of which is available to OnPath Federal Credit Union Members.

Learn more about membership by calling us at 800.749.6193.