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As part of my beginner finance series (that has yet to be named), I want to cover ALL bases for setting up a foundation of basic financial knowledge. While I did talk about setting up your first bank account, I’m sure there were some questions that you have. Today I want to talk about credit unions, can you join a credit union with bad credit?

Yes, you can join a credit union with bad credit, terrible credit, or no credit at all!

Now you can browse the site, move along now. Maybe I should dive deeper into this subject? Ok, I’ll dive deeper only because I love you all :).

The Misconception of Credit Unions

I think the biggest reason why people wonder if they need good credit with Credit Unions is that the name itself “credit union” implies that you probably need some sort of credit to “use” or be associated with a credit union.

The reality of credit unions is that, unlike their “bank” counterparts, credit unions are not-for-profit financial institutions. So what does this mean for you?

  1. Lower fees in general compared to banks
  2. Less pressure to make “more money” and more likely to focus on service
  3. Overall, they are friendlier compared to banks.

By “friendlier” I mean, these institutions are more localized and more personalized compared to a bank.

What’s The Catch of Using A Credit Union?

While I won’t say there is a “catch” of a credit union. As a matter of fact, they are a very viable and sometimes preferred alternative compared to a bank. But realistically they don’t have nearly the same offerings as a bank (particularly a big bank).

  1. Fewer branches compared to banks, so you might be run into ATM fee issues.
  2. Technology is often lagging in comparison to a bank. Usually, banks allow for better interfaces, seamless bill pay, the ability to deposit checks via apps, etc.

That’s all. This is a pretty short list of “negatives” if you count those as “negatives”. But 95% of your day to day these factors won’t matter.

The Strength of Credit Unions

I like credit unions because they are community and people focused. That means there is more personalization compared to a bank. In addition, they offer:

  • Lower rates on loans.
  • Better interest rates on savings.
  • Smaller fees on banks.
  • More lenient policies, if there is a mistake you can talk to a representative and not get hassled compared to a bank.
  • Some pay for ATM fees.

Is There A Fee to Get Started With Credit Union?

This really depends on the credit union you join. You can google “credit union’s near me” and see what pops up in your area.

I recommend checking out their website and looking at rates. I did a search for my area and I came across “Navy Federal” credit union.

Credit Union Free Checking Rates Navy Federal

Credit Union Rates

A simple checking account that has no fees, no minimums and free checks. No frills at all, but even with bad credit, you get treated the same!

Not all credit unions will have no fees, some do require a minimum savings account ($5 or $10). Again, just look online ahead of time.

If you want a credit card and have bad credit, you might be able to get a credit card to start building your credit score with them as well. Your milage may vary.

Recommendations For An Online Credit Union?

There is one credit union that I love and have an account with. This is my personal preference, but check out Alliant credit union. They have a basic interface but they provide you a $5 saving bonus by having an account with them.

I love their customer service and I have had no problem with them. Outside of them, I can’t give any other recommendations from my experience. You just need to open an account with a credit union and use your best judgment.

What are your experiences with credit unions? Do you prefer them over banks? Let me know in the comments.


Join Credit Union With Bad Credit