Patelco Credit Union Promotes Financial Wellness Through Education Resources and Its ScoreUp™ Credit Builder Loan

In a Nutshell: Patelco Credit Union is a not-for-profit organization operating in Northern California that strives to support the financial well-being of its members. The credit union serves its members by providing attractive interest rates and a full range of financial products. The ScoreUp™ Credit Builder Loan enables members to improve their credit score while building their personal savings without any fees. Patelco also promotes financial stability through various channels, including webinars and personalized guidance with a certified financial specialist.

Patelco Credit Union was established in Dublin, California, in 1936 to serve employees of the former Pacific Telephone and Telegraph Company, which is now known as AT&T. It is one of the oldest credit unions in the country and currently serves members in the San Francisco Bay Area and other parts of Northern California from 38 branches.

With nearly $10 billion in assets and over 400,000 members, Patelco is one of the largest credit unions in the country as well. But despite its size, the not-for-profit credit union maintains its member-centric principles.

Rooted in the goals of financial wellness and resiliency, Patelco has laid out a full range of financial services and tools to ensure the needs of its members are properly met.

Patelco’s “People, Not Profits” philosophy is based on the understanding that knowledge is an integral part of financial well-being. That philosophy also extends to its financial education initiatives, which include webinars and other services.

It is a stark reality that many people don’t know their own credit score. And worse yet, according to the Consumer Financial Protection Bureau, approximately 26 million Americans do not have any credit history to fall back on.

Patelco observed that many loan requests had to be declined due to people’s poor credit standings. That’s why Patelco created its ScoreUp™ Credit Builder Loan, which is designed to help people build or rebuild their credit history.

Members who participate in the program can request a loan from $500 to $5,000 and a repayment term ranging from six to 36 months. The loans are placed in a secure savings account, and members make deposits into the account each month until they reach the total loan amount. At that point, Patelco releases the funds saved in the account to the member.

“What’s great about this product is that our members can approach it from two ways. Build their credit and improve their score, if that’s something they have struggled with in the past, or if they’re new to credit, they can now establish credit. Being that we combine it with a savings avenue approach, they could also have an end goal in mind,” said Mel Murguia, Consumer Lending Product Manager at Patelco Credit Union.

Unlike many other loan programs, ScoreUp™ is a low-interest loan, which makes it a friendly approach for members trying to build their credit. Patelco felt it was important to keep the interest rate low to ensure members can achieve their goals.

“I believe that’s what also separates us, because there are other banks and credit unions that provide credit building products and services, but they have an extremely high rate, they charge an annual fee, and some of them even charge a monthly maintenance fee,” said Murguia.

Another key differentiator for this product is that payment assistance is included with every loan. If a member cannot make the monthly payments, Patelco closes out the loan without affecting the member’s credit, and the money already saved in the account is then released to the member.

“There’s no penalty and no negative reporting to the credit bureau. We just pay off the balance reported as paid in full, and then the member just receives the balance of whatever payments they were able to make early on,” said Murguia.

To help members strategize their loan options with ScoreUp™, Patelco created the ScoreUp calculator in cooperation with Duke University’s Common Cents Lab. Members can understand the true cost of their loan payments and not overspend by inputting various data points into the calculator.

Murguia mentioned that the main purpose of the product was to help members, rather than generate more revenue for Patelco. “We’re approaching it in a way that we’re really trying to help them. We’re not making money off of this product. This is truly just to help build their credit to help them save money down the road.”

Many people these days are feeling financial constraints and concerns due to the current economic climate. Rising costs, gas price fluctuations, and the looming possibility of a recession are creating a sense of instability.

But Veronica Dangerfield, Patelco’s Senior Financial Health Educator, has a more pragmatic view on the situation. She said that despite the uncertainty, consumers should remember that the market is cyclical and that, instead of preparing for a future full of dreaded changes, they should use this time as an opportunity for transformation, with Patelco’s advisors guiding the way.

“We talk a lot about resilience because that’s really needed,” said Dangerfield. “I’m a senior financial health advisor, so I have been through recessions, and I know things that go down have to come back up. You have to have both the bear and bull markets.

To enhance their personal financial well-being, Patelco members can get advice from a Certified Financial Specialist who can provide personalized strategies, tools and expertise. They can help with budgeting, credit repair, paying off debts, or any other financial needs.

“With Patelco, you have a financial cheerleader who gives you compassionate advice along with the team, because everything in Patelco is about financial help from our tellers to every facet in the business,” said Dangerfield. “It’s all focused on how we help our members weather this tsunami and come out of it. Not just change, but transformation.”

Dangerfield added that simply being prepared for change is no longer adequate, which is why Patelco is leading the way in transforming how people think about money. She said that despite the difficulties in the stock market, the craziness of crypto, and the ongoing war in Ukraine, there are still good things happening and consumers can still find a way to feel positive about their financial futures.

In addition to preparing for economic changes and transformations, Patelco wants its members to have a robust grasp on financial education and not feel left out and on their own. The credit union is dedicated to helping its members through its financial wellness resources.

“We take our members and our community out of the yo-yo. The yo yo is “you’re on your own,”” said Dangerfield. “With the financial turmoil, I almost call it a tsunami because you’ve got the social unrest and then you have the financial unrest. And so I like to think of Patelco as a bridge over troubled waters. People need trusted advisors. So we step in with compassionate and prescriptive advice.”

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The credit union provides webinars that address a wide range of topics to help members manage their money better. “Because we have been so active to exactly the pain points that our members have, we’ve been extremely successful,” said Dangerfield. “The last one we just did was a webinar on women and money. And we had over 1000 people register for it.”

“We do an ‘understanding credit’ class, and it’s always well attended. I always get lots of questions,” said Dangerfield.

“We dealt with taxes, investing, paying off your bills, and my favorite is budgeting. I love budgeting. Nobody loves budgeting. I try to bring so much enthusiasm and fun to it, so that they can embrace this because with budgeting you get to enhance the quality of your financial decisions, which enriches your life and ultimately your community.”

Dangerfield noted that the inquisitiveness of the webinar attendees and the questions they ask is really a driving force with the program. “That’s what it’s about for me. Connecting Patelco’s mission with my own. And my personal mission is to teach about money, to preach love and financial compassion, and to make people laugh. With a name like ‘Veronica Dangerfield,’ there’s got to be some comedy and laughter!”