The P.A.

A weekly address from Patrick Adams,
President of St. Louis Community Credit Union

Help Us To Help You

On January 23rd, 2017, posted in: Uncategorized by

People get so frustrated when the credit union has to deny their loan. We do too. We never set out to deny a loan. We look for ways to approve loans, but denials of borrower requests happen all the time.

Maybe an understanding of how and/or why a loan request is denied will help to ease some of the angst related to hearing those searing words, “I’m sorry we’re not going to be able to help you.” I assure you, we hate saying them as much as you hate hearing them.

As a credit union, we are a financial cooperative. In terms of lending money, we are using other member’s deposits. That being the case, our decisions must be prudent and thoughtful. We have a responsibility to protect everyone’s assets, so making a decision to loan money to someone has to involve a carefully constructed and thoughtful process.

In conjunction with our overarching fiduciary responsibility to be prudent, our board of directors annually approves policies that dictate our actions as lenders. The policies are not averse to taking calculated chances, however do not allow for undo risk to enter into our portfolio. That’s a fancy way of saying there are rules. Federal and state regulators watch carefully that we take our charge as a federally-insured depository institution very seriously. We do.

With the above-stated institutional mores as a backdrop, you are the dominant determinant to a loan being approved or denied.

  • How is your past repayment with all creditors over a long period of time?
  • Is your debt load at such a level that another loan may hurt more than help?
  • How much debt is revolving vs. installment?
  • Is there a lot of recent debt acquired, or missed payments (even sporadic), indicating a change in lifestyle and the possibility of a future strain on your finances?
  • Have you inquired about loan advances from other creditors in a relatively short window of time?

These five big questions are vetted when looking at your loan application and credit file. There are other questions asked as well, but what I just shared with you hold tremendous weight in a loan decision. Your credit score is predominantly born from these five attributes to your behavior.

Credit score alone is not the final determinant for St. Louis Community. Rather, our underwriters are taught to paint a portrait of your current and past situation in order to determine the prospects of repayment in the future. Yes, it is inexact. Making a loan decision is an art form versus a science. Help us to paint the right profile of you. Know what’s going on with the five questions above.

We want to say “yes.”  Help us to help you.

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