CWF Twin Accounts Program

Loan Amount: $500 

Interest Rate: 16%

Term: 12 months

Monthly Payment: $45.00

Match: for each monthly on-time payment (up to $500 upon completion of program)

Match Rate: 1:1

Savings Amount: $500

Market: Moderate- to low- income individuals with no or low credit scores and limited credit history

LISC/Chicago, in partnership with North Side Community Federal Credit Union, offers the CWF Twin Accounts Program to provide clients with an opportunity to build credit and savings in a secured, matched savings account at a community credit union.  Like a traditional credit union credit builder loan (such as is offered by People's Credit Union), participants will be issued a 12-month $500 loan, of which the proceeds will be kept by the credit union in a “locked” savings account until the loan is paid via monthly loan payments. NSCFCU reports monthly payments to the major credit bureaus and provides LISC monthly payment data of each borrower so the financial coaches can provide just-in-time follow-up with their clients.

Not only will this product help build the client’s credit and savings, it is also a matched savings account (i.e. IDA)! For each on-time monthly payment, the client will earn a dollar-for-dollar match upon successful completion of the program. The match, LISC believes, will reward positive credit building behavior—the on-time payment of current debt. Therefore, after successful completion of the program, the client will have a credit history of monthly loan payments AND $500 in savings AND $500 more in matched funds. LISC hopes many will use their match/savings to secure a credit card to continue building credit. However, clients may also use the match/savings for debt repayment, education expenses, down payment on a house or car, or just keep it in a savings account.

The Chicago branch of Local Initiatives Support Corporation (LISC/Chicago) collaborated with Credit Builders Alliance to develop this innovative product to serve the credit and savings needs of clients throughout their Chicago Center for Working Families (CWF) network of 12 nonprofits. The Financial Coaches at the 12 centers—who counsel workforce development clients on how to build credit, reduce debt and budget responsibly—welcome this product with open arms. The coaches are excited to pair this product with their coaching to help many clients, who find it difficult to build credit through traditional outlets, who suffer from financial mistakes, or who simply did not previously recognize the importance of credit building. With this product, the coaches are able to offer these individuals a safe, affordable product that promotes good credit and savings behavior.

Located in 12 neighborhoods across the City of Chicago, the LISC-supported Center for Working Families network services primarily low- to moderate- income individuals and families, providing  job services, financial and income support coaching, fairly-priced financial products and services and free tax preparation services. LISC is a national non-profit dedicated to helping community development organizations to build healthy, stable communities.