NCUA's Q2 Credit Union Data Summary

NCUA just issued its Q2 Credit Union Data Summary. Per Chair Harper: “The credit union system overall remains largely stable in its performance and is relatively resilient against potential economic disruptions. However, challenges persist across the system and at specific institutions,” Chairman Todd M. Harper said. “Notably, an increasing segment of credit union membership continues to experience financial strain as evidenced by a steady increase in the loan delinquency rate, charge offs, and borrowing using the NCUA’s payday alternative loan product. While interest rate and liquidity risks have ebbed recently, we are seeing growing signs of concern in loan performance, capital, and earnings as deposit levels have dropped. Credit union managers must continue to monitor their institution’s performance and balance sheets and act expeditiously to prevent small anomalies from growing into big problems.” The referenced financial strain can be seen in these stats in particular: 1. Delinquency rate increase: Delinquency rose to 0.84 , up 21 basis points from a year earlier. 2. Net charge-offs increase: The net charge-off ratio increased to 0.79% in Q2, up 26 basis points from Q2 2023. This substantial rise in loan losses is impacting some credit unions' profitability and capital positions. 3. Declining ROA: The ROA decreased to 0.69% in Q2 2024, down from 0.80% in Q2 2023. 4. Rapid share certificate growth: Share certificate accounts grew by 30.6% over the year, reaching $528.2 billion. This growth is a "return to the mean". 5. Commercial loan delinquency rate spike: The commercial loan delinquency rate rose to 0.94% in Q2 2024, up 52 basis points from a year earlier. This sharp increase indicate increasing stress in credit unions' commercial lending portfolios. 6. Credit card delinquency rate increase: The credit card delinquency rate rose to 1.98% in Q2 2024, up 44 basis points from a year earlier. This could be an early indicator of broader consumer financial stress. 7. Provision for loan and lease losses increase: This expense increased by 41.4% over the year to $13.0 billion at an annual rate in the first half of 2024. The significant rise suggests credit unions are anticipating higher future loan losses - and is likely also linked to ramifications of CECL. 8. Slower asset and deposit growth: Total assets grew by only 3.5% and total deposits by 2.6% over the year, which is slower than historical averages. When deposit growth is less than cost of funds - its really a decline...

Got different scores from different Credit Bureaus? 💯 Have you ever checked your credit score only to find that it differs across various Credit Bureaus? You're not alone! This can be confusing and even frustrating, especially when you are trying to keep your credit score in good shape for an important financial decision, like applying for a home or car loan. This phenomenon is more common than you think, and it is essential to understand why it happens. There are four Credit Bureaus in India : TransUnion CIBIL, Equifax, Experian, and CRIF Highmark. Each bureau maintain a common database and uses different /algorithms criteria to calculate credit scores. Why Scores Differ: 1. Data discrepancies: Each Bureau may have different information about your credit history, leading to varying scores because of the data quality and filtration of data. 2. Scoring models: Credit Bureaus use different scoring models, which can produce different results. 3. Update frequencies: Bureaus may update their information at different times, causing temporary score discrepancies. Recent RBI circular regarding credit reporting of data in 15 days cycle will help in faster reporting of changes in the credit history of an individual which will help lenders improve their decision-making when granting credit. What It Means for a Borrower: 1. Lender perspective: Different lenders may use different bureaus, so it's essential to check your score across all four Credit Bureaus. 2. Credit monitoring: Regularly monitoring your scores can help you identify errors or discrepancies. 3. Score optimization: Understanding the differences in score, can help you optimize your credit habits for better credit scores. While it may seem confusing, understanding the reasons behind differing credit scores can empower you to take control of your credit health. Remember to check your credit scores regularly and dispute any errors to ensure accuracy. Did you know you can get 4 free credit reports in a calendar year? Back in September 2016, the RBI had mandated that each Credit Bureau has to provide one free credit report per calendar year to each consumer, which means you can get four free credit reports in a calendar year. Remember, your credit score is a vital part of your financial life, so keeping it accurate and in good standing should be a priority. Different scores, one goal: A stronger financial future starts with understanding your credit 🗒 Authored by: Mitushi Chaurasia Co- Founder @ Athena CredXpert A Credit Repair Service Company

#RBI announced today that lenders have to now send credit information report to credit information companies (Cibil, Experian, etc) on a fortnightly basis. Governor Shakikanta Das said "The fortnightly reporting frequency would ensure that credit information reports provided by CICs reflect a more recent information. This will be beneficial to both borrowers and lenders (CIs). Borrowers will have the benefit of faster updation of information, especially when they have repaid the loans. Lenders will be able to make better risk assessment of borrowers and also reduce the risk of over-leveraging by borrowers." Rajesh Kumar shares his opinion about the impact of faster reporting. "This is a very progressive move which will significantly strengthen the credit information ecosystem. With more frequent data reporting by banks and credit institutions, CICs will be able to update credit records faster and this will translate into more updated data being available for making informed lending decisions by credit grantors. This will also help in resolving consumer disputes faster based on updated data in the credit records. Credit information solutions help create economic opportunity for millions of people in India, and we take our responsibility to deliver accurate data very seriously." As per Joydip Gupta " What we need to ensure though, is that the quality of data reported by lenders should not drop as a result of such faster reporting. Currently there are a lot of missing fields or null values in the data reported to some credit bureau(s). As lenders enhance their information technology toolkit to start reporting more frequently, they should also try to improve the accuracy of data being reported." Satish Mehta opines that this development will help lenders by providing more recent data which will enable them to make better informed credit decisioning. As per Naveen Kukreja, "This is a significant move by the RBI, and one that hopefully leads to the eventual goal of instant reporting of credit information to the Bureaus. Once in full effect, the industry should move from about 45-50 days of delay in getting access to new Credit Information to around 27 days. I hope both lenders and credit bureaus keep building strong data infrastructure and capabilities, along with standardization, to eventually move to instant reporting. It'll require investment and time, but would take the retail credit industry to an even stronger position in the long run. Increase in frequency of credit information reporting would help the overall ecosystem to do better risk assessment, particularly in cases of over-leveraging and reduce multi loans phenomena to a certain extent." TransUnion CIBIL Limited Scienaptic AI Athena CredXpert Paisabazaar Abhishek Roy Yashika Khattar #cibil #creditscore #credit

Lenders have the right to raise or bring down the credit score. In many cases, that changes the credit limits. Pay your monthly bills without maxing out a credit card or a line of Credit. The lender gives you an increase in the credit limit. An increased credit limit has several advantages, including raising your credit score by lowering your credit consumption ratio. It permits you access to more Credit if needed, such as in an urgent situation. Alternatively, if you fail to accomplish frequent and appropriate payments or have other risk problems, the lender will choose to reduce your credit limit. Reducing your credit limit will raise your credit consumption ratio and possibly harm your credit score. The lender will usually inform you if they decide to reduce your credit limit. What is the existing Credit? If you have yet to use all your credit limits, the leftovers will be your available Credit. So, if you have a credit limit of $10,000 on your credit card and use $5,000, you will have the remaining $5,000 as a balance credit. Depending on your account use, existing Credit can vary during the billing period. What Is a Credit Score? A credit score is a determined value that serves as a delegate for your creditworthiness or ability and the chances that you will repay any balances on time, matching the loan covenant terms. Credit scores are spawned depending on reports collected by credit-describing groups such as Experian, Equifax, and TransUnion. They use methods that detail weights to factors like compensation accounts, amounts owed, time of credit history, and credit use.

Fannie Mae and Freddie Mac just released data on 45 million loans that date back to 2013 with an original unpaid principal balance of $11.65 trillion 🙀. This massive data drop stems from the FHFA and GSEs' initiative to change credit scoring methods for eligible GSE loans via VantageScore 4.0 (VantageScore is jointly owned by Equifax, Experian and TransUnion) and FICO 10T by the end of 2025. This is a transition away from the Classic FICO model, which hasn't changed since 1821 🐴 (this is a slight exaggeration). Basically, the government says it wants credit scoring models to be more accurate and more inclusive. Trended data is a big component of the underwriting question. Although the GSEs are satisfied that the move from FICO Classic to more modern alternatives is sensible, lenders understandably want to look at the data themselves. Analysts at KBRA took an initial review of the data provided, with a focus on VS4 data relating to the historical loan performance data sets. It's pretty convoluted, but let's dive in. Here's what the report said: "Utilizing VS4 Current for calculating loan representative scores, KBRA compared the classic FICO score data for the loans in the aggregated GSE data set with the VS4 Current scores. The figure below illustrates the percentage of loans (by count) for each classic FICO score bucket that falls into a given VS4 Current score bucket. Loans that fall into the same bucket for both scores (for example, 750-774 classic FICO and 750-774 VS4 Current bucket) represent the percentage of the classic FICO score bucket where the two models produce the most similar result. In this case, for example, they represent 20% of loans in that bucket. Still, notable portions fall outside a +/-25 pt range, which reflects the differences in the model parameters, including the trended data that VS4 incorporates. Once FICO 10T data is available, a similar comparison could be completed, which would reduce the variance associated with the trended data feature of the models. Further, of the data set, less than three bps by loan count are loans where no FICO score was available in the data set. While KBRA notes that this observation relates to an exceedingly small portion of the matched data set, due to the fact that FICO score are typically required, this result illustrates VantageScore’s feature of producing scores for thinner file borrowers." Check out the comparison in the attached graphic 👇

Lenders have the right to raise or bring down the credit score. In many cases, that changes the credit limits. Pay your monthly bills without maxing out a credit card or a line of Credit. The lender gives you an increase in the credit limit. An increased credit limit has several advantages, including raising your credit score by lowering your credit consumption ratio. It permits you access to more Credit if needed, such as in an urgent situation. Alternatively, if you fail to accomplish frequent and appropriate payments or have other risk problems, the lender will choose to reduce your credit limit. Reducing your credit limit will raise your credit consumption ratio and possibly harm your credit score. The lender will usually inform you if they decide to reduce your credit limit. What is the existing Credit? If you have yet to use all your credit limits, the leftovers will be your available Credit. So, if you have a credit limit of $10,000 on your credit card and use $5,000, you will have the remaining $5,000 as a balance credit. Depending on your account use, existing Credit can vary during the billing period. What Is a Credit Score? A credit score is a determined value that serves as a delegate for your creditworthiness or ability and the chances that you will repay any balances on time, matching the loan covenant terms. Credit scores are spawned depending on reports collected by credit-describing groups such as Experian, Equifax, and TransUnion. They use methods that detail weights to factors like compensation accounts, amounts owed, time of credit history, and credit use.

#Credit Score - Let's decode this: A credit score is a numerical representation of a person’s creditworthiness, which lenders use to determine the risk of lending money or offering credit. It ranges typically between 300 and 850, with higher scores indicating lower risk. Credit scores are based on an individual’s credit history, which includes borrowing habits, payment history, and the length of time credit accounts have been open. #Key Components of a Credit Score: 1. Payment History (35%): - This is the most important factor in a credit score. - It includes whether past credit payments were made on time, and it looks for any late or missed payments, bankruptcies, and collection items. 2. Credit Utilization (30%): - This refers to the amount of credit you're using compared to your credit limits. - It’s recommended to keep credit card balances below **30%** of the total available credit to maintain a healthy score. 3. Length of Credit History (15%): - Lenders prefer individuals who have longer credit histories. - This factor looks at the age of your oldest account, your newest account, and the average age of all your credit accounts. 4. Credit Mix (10%): - A diverse mix of credit types (credit cards, installment loans, mortgages) is beneficial. - Having a mix shows that you can manage different types of credit responsibly. 5. New Credit Inquiries (10%): - Opening many new credit accounts in a short time can signal financial distress and may lower your score. - Hard inquiries, which happen when you apply for credit, stay on your credit report for up to two years but only affect the score for about 12 months. #Credit Score Ranges: -Excellent (800-850): Almost guaranteed approval for credit products with the best interest rates. -Very Good (740-799): Likely approved for most credit with competitive rates. -Good (670-739): Generally favorable terms but not the best available rates. -Fair (580-669): May get approved, but typically at higher interest rates. -Poor (300-579): Likely to be denied for credit, or approved for high-interest, low-limit products. #Credit Score Models: There are two main credit score models: 1. FICO Score: Created by the Fair Isaac Corporation, it's the most commonly used credit score model by lenders. 2. VantageScore: Developed by the three major credit bureaus (Equifax, Experian, and TransUnion), it offers a similar scoring range but weighs factors slightly differently. #How to Improve Your Credit Score: 1)Pay bills on time: This is the single most important factor. Reduce debt: Pay down credit card balances and keep your credit utilization low. 2)Avoid opening too many new accounts: Each application can result in a hard inquiry. 3)Check your credit report regularly: Look for errors and dispute any inaccuracies with the credit bureaus. Credit scores are essential because they affect the interest rates on loans, approval for mortgages, apartment rentals, and even job prospects.

Paying collections will NOT improve your credit scores ‼️ After successfully cleaning and repairing over 3,000 credit reports in the past 5 years, this is the blueprint 👇🏽 - Update your personal information on all main credit bureaus + secondary credit bureaus - Remove any and ALL negative accounts from your credit reports (late payments, collections, repos, etc) - Obtain at least (2) secured credit cards from major banks (Chase, Wells, Bank of America, etc) to start building your credit. Apply for an unsecured credit line with the same bank in 4-6 months. - Obtain at least (1) installment account - either an auto loan, mortgage, personal loan or a credit building loan such as Self or Credit Strong. Over time you want to have a diverse credit profile with each type of credit account. - Become an Authorized User on a trusted friend or family members credit card account that has at least 5 years of credit history! This will give you an instant credit boost ranging from 20-80+ points, depending on the account. - Continue nurturing your relationships with the banks you started building credit with by applying for more credit products & paying your bills on time! (don’t forget to set up auto pay) ⚠️ Good credit takes HISTORY (a.k.a time to build) this isn’t a get good credit quick scheme. That doesn’t exist. But if you want a proven solution + hands on support to improving your credit scores then comment ⬇️ “READY” below and I will DM you more information on how we can help! Remember, Good CREDIT is a MUST to achieve financial freedom. Don’t sleep 😴 Let’s go! 🙌🏽🔥 We also have a DIY course with customized letters for dispute, if you want to do it yourself! Comment " Letters," and I will send you the info.  Comment “fund “ If you’re looking to build business credit for your business or funding and you have a 700 credit score and LLC. Comment “ list” for a complete list of lenders to help you build business and obtain funding. If you want to sign up for credit repair services now, only a few spots remain to let the experts help you remove those negative items. DM “ready “ if you are prepared to claim your spot.  Follow➡ @creditcareofdmv Follow➡ @creditcareofdmv Follow➡ @creditcareofdmv Daily Motivation, Entrepreneurship & Gems 💎  #Credit Repair #Creditrepaircourse #Diycreditrepair #creditcoach #creditmentor #Businesscoach  #BusinessCredit #Businessfunding #Diycreditrepaircourse #Businessfundingcourse #Businesscreditcourse #diyfunding

What is a Vantage Credit Report? A Vantage Credit Report is a type of credit report that uses the VantageScore credit scoring model, developed jointly by the three major credit bureaus—Equifax, Experian, and TransUnion—as an alternative to the traditional FICO credit score. The VantageScore model considers various factors to assess a person’s creditworthiness and generates a three-digit score, typically ranging from 300 to 850.  It provides lenders with a comprehensive view of an individual’s credit history, including their credit accounts, payment history, credit utilization, and any derogatory information like bankruptcies or collections. Key Components of a Vantage Credit Report:  Payment History- The timeliness of your payments across credit accounts, which is a primary factor in determining creditworthiness. Age and Type of Credit- Considers the length of credit history and the variety of credit accounts (e.g., credit cards, mortgages, auto loans). Credit Utilization- Measures the ratio of used credit to available credit, indicating how much of the available credit limit is being utilized. Total Balances and Debt- Shows the overall debt amount and credit balances. Recent Credit Behavior and Inquiries- Recent applications for credit and other credit-related activity. Available Credit- The total amount of credit available across all credit lines.  Unique Aspects of VantageScore: Score Ranges- VantageScore versions use a range from 300 to 850, making it similar to FICO scores in scale, although some versions may differ slightly.  More Inclusive Scoring- The latest VantageScore models, like VantageScore 4.0, can generate scores for people with limited credit history, such as those with accounts as new as one month old or those who haven't used credit in the past six months. Utilizes Trended Data- Newer versions also use trended data, looking at patterns in credit behavior over time rather than focusing solely on static snapshots. The VantageScore is widely accepted, although FICO remains the dominant scoring model used by lenders. Many consumers access their VantageScore through free credit monitoring services or banking apps.     The Credit Tracker https://lnkd.in/gQPm6Ujv

Your Credit File – what you need to know to maximise your credit score. 1. Pay your Bills on Time – this shows prospective lenders that you can be trusted to pay your debts/bills. Forgetting to pay a bill will have an impact on your score – so if you struggle to remember, why not set up a direct debit? 2. Stay Credit Active – this is a bit of a balancing act, you need to demonstrate your ability to manage credit and pay bills on time, but you don’t want too many accounts or applications for new credit in a short space of time. If you have a dormant credit card you no longer use, it’s best to close it as lenders don’t want you to have too much unused credit at your fingertips. 3. Ensure you are on the Electoral Register – lenders want to verify you at your current address – they view this as a sign of stability. 4. Keep your accounts updated with your correct address and name – ensure you use the same address format and if you have recently changed your name ensure everything is updated i.e. driving licence, bank details any credit agreements you have. 5. Assess your Financial Associations – this is anyone you are deemed to be financially linked to, for example, joint mortgages or joint current accounts with overdrafts. Financial associations can show a lender that someone relies on you financially. Their name will come up when a lender checks your credit report, and the lender can take their credit report into consideration too. If they have any negative markets on their credit report, it can make your application seem like more of a risk and could impact your chances of being accepted for new credit. However, having a financial association won’t directly affect your credit score, regardless of what’s on the other person’s credit report. So, ending financial associations isn’t a quick way to improve your credit score. How do I check my credit score I hear you say? Head over to our website for more details. www.excelmortgagesuk.com