Building Credit With A Union Job

by | Jun 17, 2022 | Knowledge Center | 0 comments

A union job is any job in which you become part of a union. Rather than working as an independent employee, you become part of a union whose responsibility is to fight for your rights. The main reason behind creating a union was to safeguard the rights of employees.

There was a time when employers were indifferent and inconsiderate about the rights of their employees. During that time, the concept of union emerged. A union is an organized group of employees who bargain with employers for better working conditions.

How unions work

union job

Currently, 60 unions in the US represent more than 14 million employees. Employees have to make a monthly payment to their respective unions. Members of these unions use different labor laws to fight for employee rights like better wages, fewer working hours, financial aid, etc.

Advantages of having a union job

There are multiple proven advantages of having a union job like:

Better Salaries

According to the Bureau of Labor Statistics, union worker earns 17% more than non-union workers. At the same time, the weekly median salary of a person having a union job is $1169. The median weekly wage of a person having a non-union job is just $975.

Higher Compensation Benefits

People having a union job have more compensation benefits. The Bureau of labor statistics has mentioned some expected compensation benefits of being part of a union.

For Example, While a non-union worker earns only $2.05/hour as health benefits, A union worker earns $5.64/hour as a health benefit. Similarly, a non-union worker only earns $1/hour in retirement plans, while a union worker earns $4.38/hour. In the private sector, around 94% of union workers receive medical coverage, while only 66% of non-union workers receive medical coverage.

Improved Working Conditions

The main reason behind the creation of the union was to improve the working conditions of employees. Over the years, associations have worked hard to improve the work environment by ensuring employees have all the necessary facilities and are not working extra. They also ensure that employers do not involve employees in risky tasks.

These points need discussion before we can move ahead with our main topic, which is building credit with a union job, especially if it’s your first job.

What is credit?

union job

Credit is the money you borrow from any source, and then you repay that money with some interest. Some people find it difficult to differentiate between loans and credit even though both follow the exact mechanism of borrowing money and returning it after some time with interest.

The critical difference between them is loan gives you all the money in one go, and then you have to pay it back in monthly installments with fixed interest rates. Credit has a specific limit; you can take as much money as you want within that limit. You can pay it back according to your timeline with flexible interest rates.

Nowadays, the world is shifting towards taking credit as it is more beneficial than a loan.

Importance of Building Credit

Whether you have a union job or a non-union job, It is important to build credit. A good credit score helps you in your life in ways you never thought. We have listed some advantages of having a good credit score.

More chance of approval

A person who has a good credit score has more chances of gaining approval for loans and credits. Banks and money lenders look for a good credit score and other factors like earnings and employment status before giving you credit or loan.

Favorable Terms

Buiding credit will help you in getting facilities at better and easy terms. For Example, your credit card limit will be more, your installments will be less, and your payment period can get extended.

Saves Interest

A good credit score will help you in qualifying for lower interest rates, while a person with a bad credit score pays more money as interest. You can save money on interest with a good credit score.

These advantages encourage everyone to build credit, but if you are new to this credit world and don’t have a credit history, you will face difficulties building credit. While taking credit for the first time, most people ask how to establish credit with no credit history and credit card?

We will share some ways to build credit without a credit history and credit card.

Four ways to build credit without a credit card or history

According to Consumer Financial Protection Bureau (CFPB), Almost 45 Million adults have no credit history or have inadequate information for creating credit scores. According to a 2018 survey, around 30% of Americans do not have a credit card.

Here are four ways to build credit without a credit card and history:

Build credit with a credit union job

The easiest way to build credit with a union job without any credit card or credit history is to make credit with a credit union. Let’s answer some queries related to credit unions.

What is a credit union?

A credit union is a non-profit financial organization that offers similar services to banks. Members of credit unions borrow money from pooled resources at lower interest rates.

What is the difference between banks and credit unions?

The main difference between banks and credit unions is one is a profit-generating financial organization while the other is a non-profit organization. When a bank generates profit, it goes to its stakeholders, but when a credit union creates profit, it does to its members to increase facilities like lower interest rates, etc.

Building your credit

The credit union has been helping people fix and build their credit for a very long period. A credit union provides its users multiple direct and indirect benefits that help people with union or non-union jobs build credit.

The credit union helps build credit for the first time by offering a service called “credit builder loans.” Credit Union secures your initial deposit for a certain period. During that period, you can not use that amount. You have to make regular payments that the Credit Union sends to three main credit bureaus, creating a positive payment history for you.

Your payment history has a massive effect of almost 35% on your credit score. A credit union also helps build a positive payment history by offering low loan and interest rates that will help you be consistent with your monthly payments.

The credit union also helps you in saving more. The credit union charges less on every service. With those savings, you can pay back your debts quickly. When you pay your debt quickly and regularly, your credit score increases.

Become Someone’s Authorized User Using Union Job

The best part about having a union job is that you become a part of a close-knit community. All union members are always ready to help each other. In case you know a union member who has a good credit score. You can ask them to add you as an authorized user in their account. In this way, their transaction will build your credit score.

Pay Your Bills On Time

Depending upon your phone plan, The phone company sends the payment history of your phone bill to three main bureaus of credits. If you pay your phone bill on time, it will have a positive effect on your credit score. You can build your credit by simply paying your phone bills on time.

Reporting Your Rent Payment:

Another straightforward way of building your credit is to report your rent payments to the three main credit bureaus. Although most people ignore writing their rent payments, you can use them to build your credit. All you have to do is ask your landlord if he reports your rent payments timely. There are also multiple technologies available for this purpose.

Conclusion

Having a union job benefits you as you always have union members fighting for your rights and bargaining with employers to improve working conditions. A good credit score and a union job will make your life easier. Good credit helps you get a loan at low interest with more time to pay back the loan.

We have shared some ways to build your credit score quickly. Most of these ways are already a part of life. You can use them to your advantage.

We have also discussed the credit union, a non-profit organization that offers services similar to banking with extra facilities like lower interest rates. You can use a credit union to build your credit with no credit history.

 

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