Credit Union Borrowers Use and Seek Credit More Than National Bank Borrowers

Figure 3. Credit metrics for credit union and national bank populations

Additionally, credit union borrowers have higher debt levels than national bank borrowers. Average credit card balances were $10,293 for those with a credit union account vs. $8,278 for those with a national bank account, a 24% relative difference. Similarly, credit card utilization was 39% for credit union borrowers compared to 36% for national bank borrowers.

Maintaining low balances on credit cards can have a positive impact on the FICO® Score because the "Amounts Owed" category represents roughly 30% of the overall credit score calculation.

Additionally, we see that credit union borrowers are more likely to open new accounts; 54.0% of those with a credit union account opened a new account in the last year while 44.9% of those with a national bank account initiated a new credit obligation in the last year, a 20% relative difference.

Those who refrain from opening new credit accounts can maintain or improve their standing in the "New Credit" category, which represents about 10% of the FICO® Score calculation.

Finally, we see in Figure 4 that credit union borrowers have more credit accounts on average than national bank borrowers with 19 credit accounts on average for credit union borrowers and 15 accounts on average for national bank borrowers. This may be partly driven by the fact that 85% of credit union borrowers also have an open national bank account, while only 23% of national bank borrowers have an open credit union account. On the other hand, the increased usage of credit accounts for credit union borrowers extends to a variety of different types of credit, including auto loans, mortgages, personal loans, and student loans.

Figure 4: Credit mix for credit union and national bank borrowers