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Spring is here again, which means it is time for spring cleaning. Members get themselves in gear to clean out closets and tackle home repairs that arose during the winter, such as roof leaks and cracks in the driveway. Spring is an opportune time for credit unions to offer loan promotions such as home equity and personal lines of credit. We know that members can avoid high-interest rates from most lenders by taking advantage of loan products through your credit union.

Members know that potential gutter blockages and roof trim repairs can be avoided by cleaning debris from their gutters before the rainy season. Similarly, members should review their credit scores and credit reports before applying for a loan. Why "reports" and not "report"? Each credit bureau will have a its own credit report, used as the foundation for calculating its assigned credit score.

Proper maintenance of credit scores and credit reports can help members identify and remove outdated financial information to prevent "clogging up” their credit score (just like cleaning those gutters to prevent blockages). It’s important to identify and resolve any incorrect tradeline information, inaccurate negative payment information, or unresolved credit reporting issues which could result in lower credit scores, causing a higher interest rate (and higher payment), a reduction in existing credit line limits, or denial of loans. Any of these factors can result in a potentially lost or closed loan for your credit union. Members should be encouraged to take ample time to examine the credit report associated with their credit score for each credit bureau and also to compare the credit reports to ensure that the tradeline information is consistent among all three. It’s also valuable to identify and add any missing positive performing tradelines to their credit report to help bring about to an improved score.

There is also a more ominous reason (queue the Darth Vader music) to stay on top of credit reports. Identity Theft. If member information is stolen as part of a data breach, fraudsters can use that information to open new loans, causing headaches for you and your members. Perhaps one of the most significant identity theft indicators is a series of inquiries requesting the member's credit score. If a member sees any inquiries on their credit report by companies they are not engaged with for a transaction, they should contact the bureaus and freeze their credit until those inquiries can be researched and cleared. According to Lifelock, it takes an average of seven hours to fix an identity theft issue, but it can take up to 1,200 hours in severe cases. Once an identity theft fraudster sees frozen credit, they will typically move on to find easier prey.

Child social security fraud is big business for identity theft fraudsters. Because children do not utilize credit or try to open a checking account until they are 18, fraudsters can open loans and accounts without your members ever knowing that fraud has, or is, occurring. Encourage your members to take a holistic approach by reviewing the credit for everyone in their family. There are excellent educational resources for your members to learn about child identity theft, such as the Federal Trade Commission’s website.

Identity theft can be a daunting, expensive, and often long-term issue to rectify for both your member and your credit union. Member education is important so that they know to recognize and respond to what they see on their credit reports. It’s important for members to realize that a reduced credit score in tandem with normal credit performance is typically a warning flag about identity theft.

With inflation rising faster than income, many Americans are facing economic hardship and will be looking for money-saving opportunities this spring. Lowering their loan payments will be a significant component of this strategy. But, before the member applies for the loan, they need to ensure that they can get the best rate possible. And where does that process start? The credit score. By reviewing and correcting any inaccurate data on their credit reports, consumers can rest assured that they are entering the loan process with their best foot (score) forward.

In addition, from a marketing perspective, you want your members to have their optimal score to receive loan promotions. Think about the members who potentially should be on a promotion list but may be excluded because their credit score is inaccurate.

As financial wellness advocates, credit unions have always done an excellent job at member education. Spring is a great time to remind members that spring cleaning is not only about taking care of household tasks that have been put off during the winter. It’s also a time to review one’s finances and credit reports, and look for areas of potential improvement.

An optimal credit score is in everyone's best interest. Maintaining one’s credit score and credit report, together with monitoring for identify theft, are important practices everyone should develop. Doing so is a win-win for the both member and your credit union.