Category Archives: Credit Corner

Credit Corner – Speed or Service?

In the old days of the mid to late 20th century, financial institutions would take up to a week to evaluate a loan application. Today’s technology with online applications and smartphones has shortened the wait time to mere seconds. Rocket Mortgage promotes, “Goodbye, Paperwork” and “Get Approved Fast.” Tap n Loan brags, “A Better Day is a Tap Away.” Speedy Cash says it all in their name.

But is faster always better? While it’s much more convenient to complete the loan application online, there are shortcomings in dealing with online-only institutions. First of all, there’s no place to go if the borrower has questions. There are no “brick and mortar” branches, and phone support is spotty at best. Secondly, these sites claim to do a comparison of other large banks’ and credit unions’ rates but routinely omit smaller local institutions. The net effect is the borrower not necessarily receiving the best possible interest rate on the loan. Thirdly, the online-only outfits do not typically offer a full array of products. Finally, according to NerdWallet, a personal finance website, notes that Quicken Loans, the parent company of Rocket Mortgage, only looks at credit scores and debt-to-income ratios instead of alternative credit data such as employment history, payment track record, and monthly cash flow.

The president of Quicken Loans said recently, “I think the branch loan officer is a dying profession.” Technology is very effective for application processing and integration with other data sources to provide a full picture of the borrower but for now cannot reason and evaluate the way a human loan officer can. The borrower does have the choice today of an automated decision based on a predetermined set of criteria or a human decision based on reasoning and creativity.

David M. Green
(925) 335-3802

Credit Corner – Book Smart, Bank Smart.

As your “child” graduates from high school or college, we probably all feel assured that they are prepared to step out into the world. Properly raised and educated, off they go.

The one area of their lives that may have been neglected is personal finance. Even though 100% of us use money, only 17% of schools require a personal finance class. Before graduation, everyone should know about the difference between a bank and a credit union, how to maintain a savings and checking account, budgeting, how and when to use credit, how to buy a car and car insurance and how to file state and federal taxes. They need to know how compounding interest on a credit card is a bad thing, while compounding interest on an investment is a good thing.

Check with your graduate and if they give you a blank look about any of the items listed above, please have them come to us and we will give FREE financial advice and we’ll explain why we are the best financial institution for them. You have our promise that we will not push a credit card or any other product that does not benefit him/her.

Our industry mantra is “People Helping People” and that’s exactly what we do! Unlike banks, we are a not-for-profit organization, so we do what’s best for our members.

Shelley Murphy
Senior Vice President of Lending & Collections
(925) 228-7550 Ext. 824