How important is a credit score, and can financial education be the support tool members need to increase their ranking? Many credit union members think that making timely payments on credit cards or loans is the best way to work toward a bump in their credit score.
It is natural to assume that it’s primarily lower-income individuals or families struggling with improving their credit scores. But as a recent Pymnts.com survey reveals, roughly 40% of Americans with incomes of more than $100,000 live paycheck-to-paycheck, too. About 12% in that above-average income demographic also struggling to pay bills. Based on this, financial literacy would benefit most of your credit union’s members.
According to Ernst and Young, financial well-being also impacts consumers’ ability to engage effectively within society in general and their local communities. Eighty-seven percent of those who said they were thriving in terms of financial well-being reported their relationships with their partner or close friends were stronger than ever; this dropped to 61% among those who rated their financial well-being poorly.
Credit Unions’ Opportunity
What an opportunity this provides for credit unions to deliver value through financial wellness and empowerment! Credit unions were formed with the mission of “people helping people” get access to credit, products and services to help improve their financial health. As National Credit Union Foundation CEO Gigi Hyland says, “financial well-being for all” is a natural rallying cry for credit unions.
With members actively seeking to become more confident about money, credit unions can leverage their knowledge and members’ need to build member loyalty. By delivering on financial wellness for consumers, credit unions can become their members’ trusted financial resource. In addition, studies find that helping consumers improve their financial health is linked to greater diversity, equity and inclusion, which is important to any organization’s service and growth efforts.