Are there credit unions that are better than banks and why?

Only a specific type of customer is accepted by credit unions. Credit unions, like private schools, have the power to reject students for bad conduct or to hold tuition/services hostage in order to keep children with poor grades or in dangerous situations out of their facilities.

It also depends on what you need. Credit unions are not-for-profit cooperatives owned by its members. Members of the credit union vote on who will serve on the board of directors and who will be the CEO. You must satisfy certain conditions in order to participate. Many credit union members take advantage of benefits like no-minimum-balance checking accounts and no-fee maintenance accounts. Because credit unions are not for profit, they can offer loans at lower interest rates than banks.

It is important to note that obtaining a loan through a credit union does not guarantee approval, as credit unions will still check the applicant’s credit file and make their decision based on the credit file, just like banks, and one cannot expect to profit simply because one has a credit union account—those are just myths perpetuated by credit union employees.

Because credit unions are focused on serving its members rather than investors, they are more conservative than banks. Big banks have a tendency to chase profits, which can lead to riskier investments. As a result, credit unions have tougher underwriting standards, making it more difficult to be approved at a credit union if your credit is less than ideal.

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