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Encore Credit Rebuilder Visa

Credit Union :City County CU Of Fort Lauderdale
Assets :$294,000,000
Address :P. O. Box 14548 | Ft. Lauderdale, FL 33302-4548
Start Date :2004
Open / Closed End :Open

Loan Underwriting Qualifications :

  • Credit scores between 500 and 599
  • Derogatory trades acceptable, except must have at least three positive trades (rated as R-1 or I-1), one of which must be positive for a 12-month period
  • No repossessions or foreclosures within the past 36 months

Rates, Fees, and Terms :

  • 18% APR
  • $50 annual fee
  • Initial credit limit is $500
  • After 12 months of history, accounts are reviewed every six months for $250 limit increases up to a maximum of $1,000
  • Credit reporting agency is used to pre-screen and pre-approve members based on qualifying requirements. Members are sent a pre-approval letter.

Target Market :

Those members who would otherwise not qualify for a credit card.

Program Results/Statistics :

As of March 2010:
  • 1,179 open accounts
  • 1,035 active accounts with balances
  • $819,900 in available credit
  • $702 average credit limit
  • $549,468 in outstanding balances
  • $562 average balance per account
  • 88% of open accounts are active

Additional Information :

City County CU of Fort Lauderdale offers a suite of products under its Encore program for members with blemished credit, including this Visa Credit Rebuilder product. While the products are more labor intensive than the credit union’s traditional products and require more monitoring and more aggressive collection activity, the products have been priced suitably to make them profitable for the credit union, yet a bargain for members whose only other options may be predatory or sub-prime lenders, according to Lloyd Gill, EVP. The credit union’s charge-off ratio for this product is 8.8% (Is this still correct Lloyd?) Members can move into the credit union’s lower-rate Classic Visa program when they meet that product’s underwriting criteria.

Vendors/Systems/Technology Used :

No special technology necessary.