Check out this fun video to find out what you need to know about budgeting!
First Credit Union
Boost Your Credit Score: 4 Myths Debunked
Credit scores are an area of personal finance that seem a lot more mysterious than they actually are. Many people believe that improving them is a matter of trial and error and, as a result, there’s a lot of “credit score advice” floating around that can end up doing more harm than good. Four common credit score myths have been rounded up and debunked below:
MYTH #1: You have no control over your credit score
There are a lot of factors that make this myth easy to buy into—credit bureaus keep their exact credit score formulas a secret, you can’t access your credit report whenever you’d like online without paying a fee and it’s possible to be financially stable and still have a miserable score. It’s OK to find credit scores confusing, but if you have an accompanying “there’s nothing I can do about it” mentality, ditch it right now! Your credit score is a reflection of your borrowing and repayment behaviours, and that means you have a lot more control over it than you think.
MYTH #2: There’s a “quick fix” for your credit score
Although junk mail and late night commercials try to convince you otherwise, boosting your credit score doesn’t happen overnight. The good news is that the things you can do to positively influence your score are simple and don’t require a lot of time (or even that much effort!)—but the trade-off is that you’ll have to be patient while waiting for your new good credit habits to take effect. Your credit score is more of a track record than a snapshot, so consistency is key.
MYTH #3: Checking my credit report will negatively affect my score
This myth comes from confusing two different types of credit score inquiries: hard inquiries and soft inquiries. Hard inquiries are made by lenders or credit card companies when you apply for a new line of credit (a loan, a new credit card or a mortgage, for example). Soft inquiries are made by you or by others for background check purposes (a potential employer or landlord, for example). Because hard inquiries suggest you might be taking on more credit soon, they usually lower your score by a few points. Soft inquiries, on the other hand, do not affect your credit score in any way. This means you have nothing to lose by accessing your own score—in fact, doing so will help you understand what your current credit activity looks like and how you can improve it.
Note: there are some situations (like renting a car or a landlord running a credit check) where either a hard inquiry or a soft inquiry can be made. In these cases, it’s a good idea to find out beforehand what kind of inquiry will be made so that you know what to expect.
MYTH #4: Opening or closing a bunch of credit cards will improve my score
Even though these actions are the complete opposite of each other, this myth is still widespread—and very misleading. This is because opening and closing credit cards affects several different aspects of your credit score.
Opening new credit cards gives you more available credit, which in turn lowers your credit utilization ratio. This is a fancy term for the amount of available credit you actually use each month. (For example, if you have one credit card with a $1,000 limit and charge $200 to your credit card that month, your credit utilization ratio is 20%). Lowering your credit utilization ratio is a good thing, so opening new credit cards to boost your score might seem like a solid strategy. But remember those pesky hard inquiries? Opening a bunch of new credit cards means a sudden increase in the number of hard inquiries. Each hard inquiry docks a few points from your score, and if many are made within a short amount of time, it makes you look risky, which can further influence your credit score in a negative way.
So then closing a bunch of accounts must be the way to go, right? Not quite. Depending on the accounts you close, you could unintentionally be raising your credit utilization ratio and shortening the overall length of your credit history. Both of these consequences lower your credit score.
The best approach is to space out any credit account openings or closings. Try to time them in a way that any short-term negative impact on your credit score won’t interfere with an important upcoming car loan or mortgage. Do your research, only apply for credit products you need, and understand what a specific credit card is contributing to your score before making the decision to close it (that first college credit card may have a low limit and no rewards, but if it’s adding a few years on to your credit history, it’s best to keep it in rotation).
A boost for non-profits available through Community Investment Fund
2016 marks the third annual Community Investment Fund initiative presented by First Credit Union and Insurance. This program provides one-time financial support to non-profit organizations who contribute to the long-term social, health, economic, and collective well-being of the communities we serve.
Being able to provide a financial boost to a non-profit project or program is an opportunity for First to support vulnerable members of the community we may not otherwise connect with. Each year we are humbled by the tremendous work being done by non-profits and their ability to elevate the lives of those who need it most.
Past recipients of the fund include: Bowen Island Snug Cove House (affordable senior care), Comox Valley Family Services Association (helping youth with anxiety), Cumberland Community School Society (providing support for new mothers), Powell River Hospice Society (providing end of life care and compassion) and Texada Health Services Society (supporting those living with Cancer).
This year we are proud to announce $11,350 in funds are available. Below is a breakdown by region:
• Bowen Island $1,000
• Comox Valley $2,700
• Cumberland $1,400
• Powell River $4,400
• Texada $650
Non-profit organizations in the Bowen Island, Comox Valley, Cumberland, Powell River and Texada Island area can apply for the Community Investment Funds via the ‘community page’ of either the First Credit Union or First Insurance websites. The deadline to apply for the 2016 funds is Friday, March 18th, 2016. The successful applicants will be announced at the First Credit Union AGM in Powell River this May.
For information about the Westview Agencies Community Investment Fund, visit the website ‘community page’.
5 Identity Theft Jackpots (and How You Can Safeguard Against Them)
Identity theft is nothing new, and yet it still manages to cost its victims billions of dollars (yes, that’s billions with a “b”) globally each year—not to mention the time and hassle involved in recovering a stolen identity.
The good news is that there are tons of things you can do to deter identity thieves. The bad news is that many of us do little beyond choosing a decent password—and some people don’t even bother doing that! Here are the top 5 information jackpots for identity thieves, along with helpful tips on what you can do right now to protect yourself.
- Your Trash Can
Even if you’re really careful about the information you put online, your trash bags and recycling bin can still be an easy target for identity thieves. Dumpster diving may sound old school, but it’s still an easy way for identity thieves to get access to your personal information.
- Get a shredder (a basic model will run you $20 to $30 at a big-box store) and use it!
- Get into the habit of shredding things before throwing them out, especially things like bank statements, expired credit cards, utility bills, cellphone bills, paycheque stubs, old boarding passes and travel itineraries, and ATM receipts.
- Don’t forget to check your envelopes! Anything with your name and address on it needs to be shredded, too.
- Your Phone
Odds are that you’re carrying a lot more in your phone than just your contact list. With smartphone theft on the rise, protect yourself:
- Have a password-protected lock on your home screen. This is a standard feature on all smartphones for a reason, so take advantage of it! Bonus points if your smartphone also has location tracking (also known as the “find my phone” feature).
- Public Wi-Fi networks are not secure, so avoid checking your bank accounts or doing your online shopping from the local coffee shop or during your layover at the airport.
- Do not store sensitive information on your phone—storing passwords or login information in a note-taking app is bad news.
- The PIN Pad
It seems like every few months a new point-of-purchase scheme emerges—skimming devices, keystroke loggers, ATM hacking… the list goes on! Here are some good practices for when you’re out and about:
- When making a purchase, keep your debit or credit card in sight at all times.
- Use your hand to block the buttons when entering your PIN number, even if there’s no one immediately behind you—a camera can always be watching.
- Choose a good PIN. Avoid PINs derived from your personal information, like your telephone number, address or birthday. Avoid an easy-to-guess PIN, like the dreaded “1234”.
- Change up your PIN, especially if you use the same combination for your debit card and for unlocking your cellphone.
- Your Mailbox
Like the trash-picker approach mentioned above, mail tampering is a low-tech but relatively easy way for identity thieves to compromise your personal information. Here’s what you can do:
- Familiarize yourself with your billing cycles. A late credit card statement or a bill that never shows up could be a sign of mail tampering.
- Identity thieves will sometimes request a change of address to illegally reroute your mail to a different location. If you suddenly stop receiving mail, check with the post office to make sure this isn’t the case.
- Use a mailbox with a locking system to deter thieves.
- Your Computer
You would think that this one would be common knowledge by now, but every so often a virus or scam comes along that trips us up. Stay one step ahead of scammers:
- Keep your firewall, anti-virus and operating system software up-to-date. No matter how new and fast your laptop is, it still needs protection.
- Enable spam filters on your email accounts.
- Look out for sketchy links and emails. Ignore any suspicious password reset requests, unexpected tracking numbers or anything that asks for your personal information via email.
- Don’t overshare on social media. Do your Facebook friends really need to know what year you were born? Can people tell when no one is home based on your Instagram feed? Keep your accounts private and make sure you’re not accidentally broadcasting sensitive information.
By being aware of the top 5 information jackpots and by implementing these simple strategies, you can keep identity thieves at bay.
Some Choices Matter
Some choices matter – including where you choose to bank. You will probably do more business with your financial institution than any other corporation in your lifetime. So why not take the profits your financial institution makes, and put them to work for you and your community?
Credit score breakdown: what you need to know
You’ve likely heard about credit scores before (thanks to all those commercials with terrible jingles), but what do you actually know about them? How long have they been around? And what’s the deal with checking them?
A credit score is a number (usually between 350 and 800) that represents your creditworthiness. It’s a standardized measurement that financial institutions and credit card companies use to determine risk level when considering issuing you a loan or a credit card. Basically, it provides a snapshot of how likely you are to repay your debts on time. Widespread use of credit scores has made credit more widely available and less expensive for many consumers.
The credit scoring system that we’re familiar with today has been around since the 1980s. Before then, there was no standardized way to measure creditworthiness, so it was up to individual lenders to make judgment calls on whether or not to loan money to someone. The old system was time-consuming, inconsistent and quite biased, so a credit scoring system was introduced.
The FICO score is the best known and most widely used credit score model in North America. It was first introduced in 1989 by FICO, then called Fair, Isaac and Company. It’s also known as the Beacon score in Canada. The FICO model is used by the vast majority of banks and credit grantors, and is based on consumer credit files from the two national credit bureaus: Equifax Canada and TransUnion Canada. Because a consumer’s credit file may contain different information at each of the bureaus, FICO scores can vary, depending on which bureau provides the information to FICO to generate the score.
When credit scores were first introduced, they were used primarily for loaning money. Today, credit scores have much more pull, and that’s why it’s important to understand how they’re calculated. Your monthly car payments, your ability to snag that sweet apartment and even the hiring manager’s decision on that new job you applied for can all be influenced by your credit score.
A credit score of 720 or more is considered prime—this means you’re in good shape. Scores under 625 mean you could be turned down for a loan. Scores in the good-not-great range (625 to 720) might get you loan approval, but your interest rates will be higher than if you had a prime credit score. Nobody likes the idea of paying more money for no reason, so it makes sense to adopt credit habits that will boost your overall score.
Taking the time to familiarize yourself with how credit scores are calculated is the first step in getting a strong score. Each credit bureau uses a slightly different calculation, but the basic breakdown goes like this:
- 35% is based on payment history. Making payments on time boosts your score.
- 30% is based on capacity. This is one of the areas where the less you use of your total available credit, the better. If you get close to maxing out all your credit cards or lines of credit, it tanks your score, even if you’re making your payments on time.
- 15% is based on length of credit. Good credit habits over a long period of time raise your score.
- 10% is based on new credit. Opening new credit cards (this includes retail credit cards) has a short-term negative effect on your score, so don’t open a whole bunch at once!
- 10% is based on mix of credit. Having a combination of different types of credit (like revolving credit and installment loans) boosts this part of your score. Credit cards are considered revolving credit, and things like car loans and mortgages are installment loans.
Curious about your credit report? You are entitled to one free credit report per year by mail from Equifax and TransUnion. Spacing out your credit report requests allows you to check on your credit every six months or so. If you can’t wait for a free report by mail, you can always get an instant credit report online from Equifax or TransUnion for approximately $15.
When you receive your credit report, you’ll notice that it does not list your three-digit credit score. Despite this, it’s still a helpful reference because it serves as the basis of your credit score. If you know how a credit score is calculated, then you know how to look for factors on your credit report that might be influencing your score for better or for worse. It’s also an easy way to look at account openings, account closings and what your repayment history looks like.
You can get access to your actual credit score from either Equifax or TransUnion for an additional fee ($20 to $25).
Some commercials make it seem like credit scores are big, mysterious, randomly assigned numbers. But with a little research, a little patience and some good habits, you can influence your credit score in a positive way and not be caught off guard by a denied loan or an outrageous interest rate.
Changemakers among us
You don’t have to go too far to find changemakers in our community. These are people who are passionate about making a positive difference in the lives of others, people who act to make the world a better place to be, people like the staff at the Community Resource Centre.
The Community Resource Centre (CRC) has been operating in Powell River since 2007. While the CRC’s services are available to everyone, their main purpose is to assist the most vulnerable members of our community by providing a safe place for them to socialize, integrate, learn, and have access to basic services. Many of their clients are experiencing low income, social or cultural isolation, homelessness, or are at risk of becoming homeless.
The CRC provides a range of services including the Harmony Cafe, cooking classes, public access computers, public telephone, volunteer tax-help, legal and community services information, and even laundry facilities. Behind the building is a thriving garden and a composting demonstration centre. The produce grown in the garden supplies the Harmony Cafe.
It takes a lot of volunteers and community support to run the Community Resource Centre effectively; our staff experienced this first-hand when they volunteered their time to do fall maintenance in the CRC garden during Community Impact Day 2015. Last week were were thrilled to be able to support the essential work of the CRC once again, this time with a financial donation of $7,500. We’d like to shout out a big thank you to our creditor insurance provider, CUMIS, for contributing $2,500 towards this donation, as part of a nation-wide initiative to support local non-profit organizations.
One of the highlights of my job is presenting donations on behalf of our organization and our members. At the end of the cheque presentation, Martyn and Jessica presented us with a gift – a beautiful thank you card signed by the CRC staff and clients. In it they wrote:
“Alone we can do so little, together we can do so much!”
We wholeheartedly agree. Thank you CRC for making a positive difference in the lives of our most vulnerable community members. Thank you for being changemakers!
Banks vs credit unions: what you need to know
What was the very first financial choice you ever made? It likely took place before your first job, even as far back as when your annual income consisted of money from the tooth fairy and lucky pennies. The very first financial decision you ever made is also one of the most important choices—where to keep your money.
When you first made that decision, piggy banks, sock drawers and buried-in-the-sandbox- like pirate treasure all seemed like perfectly acceptable options. As it turns out, they aren’t nearly as super-secret as you might have hoped. Opening a bank account is the best solution, but in order to do that, you first need to choose a financial institution—so, your choice is between a bank and a credit union.
Banks and credit unions offer essentially the same products and services, but there are huge differences in the way they operate. Despite this, many people put more thought into building their Netflix queue than they do choosing their financial institution. We are here to help fill in the gaps and show you how the differences can affect your dollars. Whether you’re just starting out or rethinking your current financial setup, here is what you need to know.
The main difference between banks and credit unions is in their structure. Banks are purely for profit, while credit unions are member-owned. This means that banks have numerous expenses that credit unions simply don’t have. Banks have to pay their shareholders and their private investors in addition to regular operating costs. Banks are set up in a way that allows a select group of people to make money off of your banking activity.
Credit unions, on the other hand, are set up in a way that allows all of their members to benefit from their profits. Once the operating costs are covered and reserves are set aside, the profits are distributed back to members in the form of dividends, patronage and community investment. Credit unions are accountable to their members, and therefore accountable to the communities that they live in. First Credit Union gives thousands of dollars back every year in the form of donations, sponsorship, scholarships, and youth leadership programs.
Credit unions sound pretty great, right? You might be wondering why some people choose banks over credit unions, even though credit unions consistently outperform banks when it comes to deposit and loan rates and customer service.
The simple answer is that banks are bigger, and some people believe bigger is better. A more effective approach would be to figure out your banking priorities. Here are some factors to consider:
1) Am I eligible for an account? Banks are open to anyone. Some credit unions have membership requirements, but don’t let that intimidate you! Requirements can be as simple as living in a certain community or working in a certain field. First Credit Union has very open membership requirements.
2) How much does it cost to get set up? Are there any fees associated with opening an account? Is there a minimum balance required? Joining a credit union involves purchasing a share, but this is different from a fee—it means you’re a member-owner of the credit union.
3) Will I have good access to ATMs? You might feel as though you see bank ATMs everywhere, but credit union ATMs are just as accessible. Credit union members have access to a network of thousands of ding free ATMs from sea to sea. In fact, the largest credit union ATM network in Canada is larger than the networks of both Scotiabank and the Bank of Montreal. You can find the closest ding free ATMs with the ding free ATM Locator App.
4) What can I do online? More and more financial institutions are offering online banking services. Find out what you can do from your computer and smartphone. Can you check your balance? Schedule payments? Transfer money between accounts? Taking advantage of online products can be super-convenient, and can avoid a trip to the ATM or the nearest branch.
5) And speaking of the nearest branch, where is it? Find out what the hours of operation are and how they work with your schedule. Find out if you can bank through other branches, too. This could come in handy if there’s a location close to work or school.
6) What can my financial institution do for me? Ask about products that are tailored to your situation. How do the interest rates compare to other financial institutions? Are there free products you’re eligible for? Don’t settle for a financial institution just because you need an account—you should also want to have an account there.
At the end of the day, choosing a financial institution is a personal decision with a huge influence on how you manage your money and your time. If you make the effort to ask questions and compare services, you’ll find the best home for your finances.
The Volunteer Experience: Gratitude, Happiness, and Pride
It was not a decision that was made lightly; on Thursday October 8 First Credit Union & Insurance and Westview Agencies closed early. At 2pm, 140 staff turned off their office lights, loaded their vehicles with shovels, paint brushes, aprons, craft supplies, and scrub brushes, and headed into the community to work as volunteers.
What possessed us to potentially inconvenience our members and clients? Why did we decide to close early during an incredibly busy work week? We did it to make a statement – serving our communities is important to us. We did it because we believe in people helping people, and that volunteering is a powerful way to strengthen our communities. We were hoping that our contribution would make a positive difference but we weren’t quite prepared for what we got in return.
For 3 hours our staff painted, filed, prepped food, cleared brush, scrubbed, planted trees, cleaned playgrounds, served seniors, weeded gardens, made crafts, and fund-raised for a local food bank. As we came together at the end of the day to share our stories, it was clear that although we’d volunteered for different organizations, we had all shared one very powerful experience – we were bursting with gratitude, happiness, and pride. Grateful to the non-profit organizations who work for our benefit every day; by volunteering we got to know more about them and we were in awe of what they accomplish. Happy to work alongside our coworkers towards a common goal; although we were working hard, we were having fun and the camaraderie was uplifting and energizing. Proud to work for our organization; closing early so that we could volunteer was a bold statement, but one that clearly articulates our values – how wonderful to work for an organization that ‘walks the walk’!
We started out wanting to make a positive impact – and we did. But what surprised us was that for that for all the positive energy and goodwill that we gave to our communities that afternoon, we received it all back … and more. Will we host another Community Impact Day? I hope so. Closing for a few hours so that we could volunteer in the community was a powerful experience – one that I would love to be part of again!
Get On Board the ORCA Bus!
It’s a rainy day in Powell River, but that didn’t stop the ORCA (On the Road with Children’s Activities) Bus from making its rounds. This morning I caught up with them at their scheduled stop at Pacific Point Market to present Elise Statham, our local Success by 6 Coordinator, a cheque for over $1,500 (the concession proceeds from our 2015 Powell River Movie Night). While I was there, a van pulled up and two children tumbled out, laughing as they raced each other to be the first one on the bus.
What makes the ORCA Bus so special? Well first, this much-loved vehicle delivers fantastic early childhood programs to areas in our community that may not have access to them otherwise – from Saltery Bay to Lund, and everywhere in between. The bus delivers a Strong Start outreach program for SD#47, Family Place programming, Infant Development Programs, and many of other activities with various organizations and businesses in Powell River.
But even more than its great programming and unique way of reaching out to everyone in our community, I think what makes it so special is the collaborative spirit that makes the ORCA Bus possible. The bus receives significant support from local volunteers, businesses and organizations – without the volunteer time, without the donations, and without the community partnerships, this bus would not be on the road. It is truly a gift to our community, from our community!
What can you do? Check out their schedule to find out when the ORCA Bus will be in your neighbourhood next. Ask Elise how you can get involved. Get on board the ORCA bus!