Fresh Start program aims to improve credit ratings

chawes@bradenton.comJuly 19, 2011 

BRADENTON -- In a swirl of events that included a broken neck from a work accident, two major surgeries, and serious lingering health conditions, Rick Bouknight had seen his credit score dip down to the low 400s.

“I ended up being totally disabled and dependent on Social Security,” Bouknight said of the turn of events in 2005. “My income was cut by a total of 80 percent, and a couple of our vehicles were repossessed.”

With seemingly few options to improve his credit score, Bouknight turned to his local credit union, Manatee Community Federal, then known as Tropicana Federal Credit Union. Initially inquiring about a personal loan, Bouknight was steered by credit union employees to another option: the Fresh Start Loan Program.

He’s now gone through the program twice, and his credit score has improved to about 580. The change enabled him and his wife, who at one time worked two jobs to cope with their financial issues, to trade in her car for a new one three weeks ago.

“This worked great for me,” Bouknight said. “It worked exactly as it was intended to. It rebuilt my credit, and it gave me a track record of good payment with my credit union.”

More than 2,500 people have partaken of Manatee Community’s Fresh Start Loan Program since it was first offered in the early 2000s, says spokeswoman Suanne White. The program’s popularity reflects the credit union’s high priority on helping its clients change their credit standing.

“When your credit’s not good, it’s like you’re standing on the outside looking in,” White says. “Improving your credit means improving your everyday life.”

Here’s how the program works:

Any member with a savings account of at least $25 is eligible. The credit union loans the member $1,000 that goes immediately into that savings account, where it must remain for at least a year

The member has 12 to 24 months to pay off the loan, which is provided at 16 percent interest. Many choose to have their payments automatically debited from their direct-deposited payroll checks.

Throughout the program, Manatee Community offers credit rehabilitation counseling, White says. Members are advised to pay their debts on time rather than just pay them off, so they can establish a payment record. They’re guided on which credit blemishes to dispute, and which they should ask be cleared from their record.

At the end of the program -- which members can go through as many times as they want -- members have improved credit scores, and savings accounts that have grown by at least $1,000. They’ve also learned things they might not have known about how to continue improving their credit.

Thomas Bell, for example, described himself as a “novice” in obtaining good credit until he went through the Fresh Start program following a divorce. His score is now about 552, up from its prior low of 500. He’s also debt-free.

Not everyone who participates in the program is trying to recover from a poor credit score. Brea Styles, for example, had a pretty good score after purchasing a home but learned through the Fresh Start program that she wasn’t doing what was needed to continue improving her score.

“I was paying off my debts, and had no problem paying for the things I wanted,” she says. “But I had to learn that it’s not always good to just pay by cash, that it’s good to have lines of credit.”

Christine Hawes, Herald business writer, can be reached at (941) 745-7081.

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