Thank you for your interest in AFCU's 1st Auto and 1st Credit Card Credit Builder Products.* These products are for applicants who have no credit score or otherwise inadequate credit history to qualify for our standard auto loans and credit cards.
We are thrilled that you came to us to start your credit history. We want to help you to build and keep a positive credit file. To that end, we give you a lot of information to get you started, starting with this document that we ask you to take the time to read.
This document is to be provided to all Credit Builder applicants at the time that they apply to provide some information on credit. This document is a supplement to another requirement for this program, which is completion of the FITacademy Wise Use of Credit course and viewing of the YouTube video that goes with that course.
- • A loan or credit card agreement is an agreement between a lender and a borrower. The lender's obligations include disclosing potential costs and terms of the borrowing. The borrower's obligations include making payments on or before their due date, paying all fees, maintaining collateral, and keeping collateral insured.
- • Regarding insurance, the state requires liability insurance. Liability insurance protects a vehicle owner for damage that they cause to other property or for injuries to others. A lender requires comprehensive and collision insurance with the lender listed as loss payee.
- • A default in a credit obligation occurs when a borrower does not meet the terms of the loan agreement, including not paying as agreed, and not maintaining collateral or insurance on collateral. When a borrower is in default, a lender has the right to initiate various collection actions including legal action and repossession.
- • If you are having trouble meeting your credit obligation, it is always best to reach out to the lender to advise of your situation and make arrangements to get back on track.
- • Loans and credit cards are reported to the credit reporting agencies and affect credit score. Actual payment histories are reported. By law, lenders do not have discretion to change credit reporting that is different from what actually occurred. In short, we cannot and will not say that you were not late if you were.
- • What will Advantage do if I don't pay?
- • As stated above, never just don't pay. Always maintain communication with us and we will do everything we can to help you.
- • If you do end up defaulting on your obligations, we will have no choice but to take steps to collect our debt through legal means and repossession. That is bad for you and for us. Repossession and charge off are major derogatory occurrences and will have a significant impact on your credit score and will stay on your record for ten years.
- • A repossessed car never sells for enough to cover a loan balance, and the borrower still owes the left over, i.e., deficiency balance after a repo is sold. This is true whether the repossession was voluntary or not.
*Credit Builder Products are not guaranteed to build credit and/or increase your credit score.
