March is National Credit Education Month. The Citizen Potawatomi Community Development Corporation guides CPN Tribe members and employees for free as they build their credit, helping them lower interest rates, qualify for home loans and achieve their financial goals.
Although an individual’s credit score does not represent their entire financial portfolio, it affects their ability to obtain low interest rates on auto loans, qualify for a home loan, or finance businesses. commercial. Many people know that a high credit score helps and a low credit score hurts, but they don’t know how to improve or manage it.
CPCDC Commercial Credit Officer and Certified Credit Counselor Felecia Freeman helps clients fill these knowledge gaps.
“In high school, I didn’t learn anything about financial literacy,” she says. “So it’s hard for people to know what they need to do to build credit. Many people have had bad experiences – got burned, made decisions that weren’t beneficial – and walked away thinking they couldn’t fix past financial mistakes. Fortunately, this is not the case. You can rebuild your credit quite easily with a credit builder loan that the CDC has.
Freeman pointed out that most people’s credit rating increases once they learn about its components. The three major credit bureaus – Equifax, Experian, and TransUnion – consider a few key terms when calculating a credit score.
“All three bureaus use a bit of a different algorithm or matrix, if you will. They use different percentages, but ultimately it’s the same data that each credit bureau looks for to determine your score,” Freeman said.
Paying bills on time remains the most effective way to increase and maintain a high credit score, accounting for over 35% of the algorithm.
Freeman educates his clients on how to view the situation from the perspective of the credit bureaus. Together they decide which areas need help and discuss simple, manageable ways to improve their financial portfolio.
The CPN Community Development Financial Institution also helps customers without a credit score to create one from scratch.
“The most important aspect of building or rebuilding your credit is getting a good monthly report,” Freeman said.
She enjoys seeing advice and education turn into success. CPCDC offers several personalized tools and services, including credit counseling, credit building loans, employee loans, and business loans for business owners.
“Most credit unions and CDFIs have credit-building loans,” Freeman said. “But these are ‘pay-it-forward’ loans. It’s a secured loan because we back up the loan with the money you deposit into an account each month specifically for that payment, and we report that good history to all three credit bureaus.
Another factor to consider are auto loans.
“You need a car to get to and from work, but there were so many employees who were being exploited by predatory ‘buy here, pay here’ lenders, and that’s exactly why the CPN and the CDC launched the automotive program,” Freeman mentioned.
CPCDC launched the JumpStart car loan program for CPN employees in 2010 to alleviate these pressures, provide better loan terms and create credit from a car payment.
CPCDC also assists tribal members of the CPN on the path to home ownership. Freeman points out that it’s more accessible than many people realize. She remembers helping someone get a home loan after a divorce and a decade of renting as one of the most memorable successes of her 15 years.
“They didn’t believe they would qualify,” she said. “Never underestimate the power of good credit and how you can make it work for you.”
The CPCDC and Freeman also help Native American entrepreneurs finance their businesses. Sometimes that means improving their credit in addition to counseling sessions with staff before applying for a loan. Whatever their needs, the CPN CDFI has options.
CPCDC offers tribal members and CPN employees the opportunity to take control of their finances. To learn more about the department and its offerings, visit cpcdc.org or Facebook @cpncdfi.