Establishing Credit – How to Build a Credit History

Posted on August 3, 2011 by Lisa Florian

Which came first, the chicken or the egg?

Image extracted from: A Vegan Ballerina

We’ve all heard it before, the old “chicken or egg” question now let’s apply it to a real life scenario. You apply for a job and they’d like you to have more experience yet you need the job to get the experience. Sound familiar? The same applies to your personal credit situation. You need to establish credit so that you can build your credit history for future purchases including a car, home etc. However, when you apply for credit without any prior history, it can oftentimes be difficult to obtain. Chicken and egg.

Using Credit Cards

Believe it or not, it may seem like a great idea to use cash for all your purchases but it will come back to hurt you in the end when you are trying to make one of the purchases mentioned above – unless of course, you are using cash for that too which is unlikely. Establishing credit and using it wisely is what you want to do but the first thing you need to do is find an institution that will issue you credit so you can get started.

Establishing Credit with a Secured Card

Image extracted from: The Breaking Story

For those working on establishing credit, a secured credit card is usually the easiest type of credit to get. It requires you to make a cash deposit that the creditor can keep if you do not make your payments. (You will get the deposit back otherwise.) The credit limit is often low, and the interest can be high, but you may be able to convert it to a regular credit card after a year or two of on-time payments. You want to make sure that the creditor reports your account to the credit bureaus – if they don’t, you won’t be establishing credit and a credit history.

Getting a cosigner

Another strategy for establishing credit is to have someone with a good credit score cosign an account for you. This requires a great deal of trust on the part of the cosigner – if you fail to pay, he or she will be held responsible for the full balance. If you are under the age of 21 and are applying for a credit card, you have no choice but to obtain an application that contains the signature of a parent, guardian, or other individual 21 years of age or older who will take responsibility of the debt or proof that you have independent means of repaying any credit extended. Gone are the days of applying for a credit card on a college campus to get a free t-shirt without having verifiable income. That’s how I got my first credit card and got started on establishing credit.

A safe bet is to apply for a secured credit card, use it a couple times a month for purchases where you’d normally pay cash and then pay it off at the end of the month. You aren’t racking up debt but you are building credit.

For more information on secured credit and establishing credit, visit us at riverset.com or call 412.488.2525.Riverset Credit Union is open to those in Allegheny, Beaver and Butler Counties.

To Refinance or Not to Refinance your Auto Loan

Posted on July 1, 2011 by Lisa Florian

You’re in the market for a new/used vehicle and an auto loan. You conduct extensive research online to learn what you can get for your trade in, review dealer inventory, current auto promotions, color/features that you want – the list goes on and on. You think about what payment makes you the most comfortable with for your auto loan (incidentally, NEVER start out your conversation with the salesperson at the dealer by revealing what payment you want… I’m sure they’d love to extend the term from 60 months to 72 months to get you there) and you make your way to the dealer, get what you want, and drive off. Now what?

You’ve signed the papers but that doesn’t mean that you shouldn’t give a second thought to your auto loan. What is your interest rate? What is the auto loan term? Refinancing your auto could save you money and, it is typically a relatively quick and painless process.

Interest rates are historically low. Just check online to see what they were a couple of years ago and what they are today. When you purchased the vehicle, how was your credit? Poor, Average, Great? Has anything changed? If it’s improved you could secure a better rate. And, even if it was great when you first secured your auto loan, the rates now could even be better. Remember, you can access your credit report for free each year at www.annualcreditreport.com.

Again, refinancing you auto loan depends on a number of factors including is there value in the vehicle or are you “upside down” (i.e. vehicle is worth less than the auto loan balance), age of the vehicle, repayment terms and possibly a number of other factors. Check out this article regarding the five best situations for an auto refinance on your car loan from bankrate.com. The article provides some quick tips and states that “finding a lender that refinances is the easiest step in the process and goes on to state that credit unions have money to lend.” So, I say do your research, utilize the online auto loan calculators at riverset.com to see how much you could save and if refinancing is the best option for you, take it. Even if it is only a savings of $20 a month, it could mean saving hundreds or thousands over the life of the auto loan.

Riverset Credit Union is open to those in Allegheny, Beaver and Butler Counties. To view our auto loan rates or to apply, visit us at riverset.com.

Riverset Credit Union and Community Relations

Posted on June 22, 2011 by Regina Anderson

What is community relations and what is it like working in the community relations field? Patrick Flynn of Riverset Credit Union tells us a bit about his career to help us learn more.

Patrick Flynn & Lisa Florian

RA: Please tell us a bit about yourself.

PF: I am a born and raised in Western Pennsylvanian. I graduated from Pennsylvania State University, The Behrend College in Erie, PA in 2000, with a Bachelors Degree in Marketing with a Minor in Management. I moved back to the Pittsburgh area after college to pursue my career opportunities. I currently serve on the Advisory Committee for the Regional Internship Center and work as a District Director for Delta Sigma Pi, Professional Business Fraternity, at the University of Pittsburgh, where I serve as a mentor to Business students. In my personal time, I’m a season ticket holder for the Pittsburgh Penguins and avid traveler and disc golfer.

RA: How did you come to Riverset?

PF: I’ve currently been working at Riverset for three years. I was unhappy with the career path presented by my former employer so I began a job search and I found an ad for this job with Riverset on the Post Gazette/Monster job search engine. I thought it was a natural fit for me as I’ve been a member of a credit union since my parents opened my first ever savings account. I love the idea and the mission of credit unions and just went for it. Best decision I’ve ever made.

RA: What is it like to work at Riverset?

PF: It is a wonderful working environment at Riverset. Being that credit unions are “not-for-profit financial cooperatives”, it is a smaller workforce (only 32 employees). Coming from a Fortune 500 and another large corporate organization, it is very refreshing. I have an understanding boss who allows me to be me and do what needs to be done to make my position successful. The best part is that it is always stressed that we do what is in the best interest of the member or potential member. I love that aspect.

RA: What is community relations to Riverset?

PF: As we transitioned to a community chartered financial institution in 2009, we recognized that it was now more important than ever to reach out and help local businesses, organizations and individuals in the community. That’s when the Community Relations part of my title was created. I am tasked to research and schedule monthly community service events for our employees. I try to find a nice mix of organizations to work with to make sure that we keep employees engaged. I also will find opportunities, if available, on our end for us to make charitable or financial donations. We have sponsored events for the Western Pennsylvania Humane Society, Big Brothers Big Sisters and Habitat for Humanity and made charitable donations to Toys for Tots, Family House and Children’s Hospital.

RA: What kinds of things do you do within a typical week?

PF: A lot of my time may be spent on visits to our “partner” companies to meet with their employees or researching new possible partner groups. It is also spent looking over websites, reading local papers and searching out new opportunities for volunteering and community outreach.

RA: What other departments do you work with at Riverset?

PF: My job spans two different areas: Business Development and Community Relations. It is my job to go out and find businesses and organizations that would like to partner with Riverset and then schedule times where I can meet with their employees to educate them on our products and services. It’s a wonderful balance of “business-to-business” and “end consumer” sales.

RA: What is a cool project you are working on currently?

PF: One of my favorite community relations projects, which is ongoing, is Dancing Classrooms Pittsburgh, a program of Mercy Behavioral Health. Dancing Classrooms is a program placed into local elementary schools to help build social awareness, confidence and self-esteem in children through the practice of social dance. The movies “Mad Hot Ballroom” and “Take the Lead” were based on this program. The children are taught ballroom dancing during their gym classes for 10 weeks. At the end, 6 couples are chosen to represent their school at a “Colors of the Rainbow Semi-Final” competition. Those that are chosen are not just based on their dancing abilities but on their discipline and respect and hard work in school. Currently, I am working on an upcoming fundraiser for the program to help keep the program moving forward in the upcoming years. I am receiving the same dance lessons as the children did and will be dancing with my co-worker and 5 other couples in front of a lot of people to help raise funds.

RA: What else should people know about your job?

PF: Well, that my job requires a lot of networking and the ability to be professional and know how to talk to anyone. I have conversations with everyone from front-line staff to organization leaders and CEOs. You have to know how to be able to work with everyone to develop community relations. One of the most important things that anyone should know as they move forward in their education or career path is how to network. This is a key aspect to me finding companies to work with both in the business and outreach levels.

RA: What great things do you have on the schedule at Riverset that we should be on the look out for?

PF: I am constantly tweaking and working on our outreach programs. Upcoming, we will be volunteering with such wonderful organizations as The Bradley Center, Family House, Emmaus Community of Pittsburgh and the Greater Pittsburgh Community Food Bank. We are constantly updating our website with upcoming and completed events. If you know of a great organization that you feel could use some help on the volunteer level, don’t hesitate to let me know. I will always research any suggestion to see if it is a viable fit for our employees.

Thanks Patrick for giving us a glimpse into a career path in Community Relations! Don’t forget, The Regional Internship Center has partnered with Riverset on many occasions! If you have a profile with the RIC, you are eligible for membership to Riverset. Contact Patrick at pflynn@riverset.com

What You NEED to Know About Debit Interchange Fees

Posted on June 1, 2011 by Lisa Florian

Image extracted from: Financial Fortune Builder

What are debit interchange fees and why should you care about them? As a consumer it’s important to stay informed and that means knowing what debit interchange fees are and understand regulation changes that are being made with debit cards and checking accounts. It all affects you!

First, what are debit interchange fees?

Debit interchange fees are the fees retailers pay the bank every time you use your debit card. So, debit interchange fees help pay for consumers and merchants to access one of the most convenient payment systems in the world debit cards. They are easy to use and it helps people control their spending, as consumers are not borrowing money from a credit card, they are more likely to use only what is available in their account. More about this on About.com.

Currently, these fees are not regulated by the government and banks determine the amounts to be charged based on their own costs to process the transactions. The cost to retailers is usually something between 1 and 2% on each dollar spent. Merchants pay these fees currently, and with the money accrued by the debit interchange fees, banks and credit unions like Riverset are able to offer free checking accounts, debit card rewards and lower fees to its customers.

So, what’s the issue?

As a result of lobbying efforts from large retailers, new government regulations intend to cap debit interchange fees. Stemming from the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Durbin Amendment, advanced by Sen. Richard Durbin, allows the Federal reserve to “cap the debit-card transaction fees, also called swipe fees or interchange fees, at 12 cents per transaction, a significant drop from the current 44-cent-per-transaction average that would eat into banks’ debit-card fee profits,” according to article on the Wall Street Journal.

Banks and credit unions would be hard hit by the new regulations. The new cap on debit interchange fees will force financial institutions, banks and credit unions alike, to find alternative profit streams through the elimination of free checking, the elimination of rewards programs and the implementation of higher fees should the new regulations move forward as presented due to its strong-pro merchant stance.

Retailers argue that they will be able to reduce their operational costs and reduce the prices of their products. As a result, the nation’s largest 2% of retailers will receive a 412-billion break – and debit card users like you will have to pay the tab in the form of bank fees.

What can I do?

Due to the debate surrounding the Interchange Rule and the impact it will have on consumers and financial institutions, it is imperative to keep informed. Presently, the debate has resulted in Senate Bill 575 and House Bill 1081 – a push to delay and further study the rule and we as consumers should take action.

Can you imagine actually having to pay to use your debit card or be limited on the number of times you can use it in a month? Trust me, this will affect you. Please support Senate Bill 575 and House Bill 1081 to delay and study the Federal Debit Card Interchange Rule. Take action – write to your Congressmen and Senators today. Read more on the Riverset website.

Financial Advice and a Home Equity Loan

Posted on February 28, 2011 by riverset staff

Joan Cagney, Lending Supervisor at Riverset credit union tells a very simple story of how a credit union offers a helping hand to its members. This is an example of how the right financial advice can put you on the right track and help you enjoy financial stability. Could you use some financial advice?

Image extracted from: creditcard-default.com

The Fist Step is to Ask for Help

One day, a member came to me seeking financial advice under the recommendation of her father. Her father advised her to take out a home equity loan so that she could consolidate debt although even he wasn’t 100% certain that was her best option. This was the only initial information that she gave to me. She said “I am looking for you help and guidance.” And thus, the story begins.

Do You Pay Your Bills on Time?

While in the course of reviewing her credit during the loan process, I noticed that many of her “small” bills had a history of delinquency. With the home equity loan, we decided to consolidate student loans along with these bills but I wanted to dig a little deeper to see why these bills had fallen through the cracks at times. When I asked her to tell me a little more about the situation, she replied “honestly, I hate having to sit down and write out checks.”

Consolidate Debt Through a Home Equity Loan

In addition to closing a home equity loan, I personally helped the member set up automatic payments on her utility bills, as well as her primary mortgage, to help make paying her bills more convenient and keep her on track.

Preparing Yourself For “Rainy Days”

Everything was going well and then all of a sudden, the member informed me that she was going to take a leave of absence from work for a short period of time in the near future due to health issues and wasn’t sure how she could continue to make her payments. I reviewed her entire relationship with us and noticed that she only had a small balance on her Riverset line of credit. I updated all of her information and gave her an advance on the credit line to help during this difficult time. With the members’ permission, we put the money from the credit line advance into sub accounts so that if she was off longer than expected, she would then have the money to pay her bills as well as the loans with Riverset and remain current.

Unexpected health complications arose which did not permit her to return to work in the timeframe expected. I filed her disability insurance claim to cover the home equity loan and, each month would contact her to see how she was doing and transfer money into her checking account at the credit union to pay her monthly bills. This went on for several months.

A Happy Ending

When the member was returned to work, her bills were current and she was relieved and so very thankful that she didn’t miss a beat financially as far as her monthly bills were concerned.

After some time had passed, I received a note in the mail from this member’s father. The note read “Joan, although I do not know you, I cannot thank you enough for what you have done for my daughter. I’m not even sure why you did it, but again, I want to thank you.”

Helping a member achieve financial stability is what gives me personal satisfaction in my job. This letter was perhaps the greatest reward that I have ever received in the many years that I have been in this position here at Riverset and in my previous work experience.

Even now, when this member wants to do something that involves a financial move, she calls me. She had her bumps along the way but she also knows that without the credit union, she wouldn’t have been able to stay on track and be in the financial position that she is in today.”

Thanks for sharing your story, Joan!

Students: Free advice on paying your bills!

Posted on February 1, 2011 by Lisa Florian

Students have more responsibilities than just going to school and getting good grades. Often times, students leave their parents home and need to learn how to take care of themselves. Cooking, cleaning, and paying your bills are part of this learning process. Lisa Florian, from riverset Credit Union offers some advice on how to make your life easier when paying your bills.

Image extracted from: georgevreilly.com

Wasting Time

Now it’s not everyday that a financial institution posts this headline. But, we have good reason.

Did you know that the average American spends two hours a month paying bills? Writing checks, addressing envelopes, purchasing postage and putting the bills in the mail – it’s exhausting even writing about it. At riverset, we don’t want you to stop paying your bills…

(that of course would be completely irresponsible- unless you have a good reason and remember, if you are having trouble paying your bills, riverset offers free financial counseling to our members)

…we want you to pay your bills smart and make it e-z on yourself with riverset’s new e-z pay online bill pay.

Paying your bills, gives you a chance to win

Image extracted from: apple.com

And, not to sound like a total advertisement but nonetheless it’s true – sign up by April 1st and you could win one of two IPad’s! Real people always win our contests. You don’t have to sit around waiting like you do for the “prize van” that never seems to arrive at my house…your chances are much better and we will show up if you win!

Fact: using online bill pay is more secure than sending a check in the mail

Not only do you have the chance to win an IPad, but by signing up for riverset’s new e-z pay online bill pay, you’ll have access to technology that includes the ability to Pay a Person. Our personal payment service enables you to send and receive money to those you know, or owe, in as little as one business day — securely and electronically — right from riverset’s new e-z pay online bill pay. All you need is their email address or mobile phone number! Really, we aren’t kidding. Check out our riverset e-z pay online bill pay tutorial and learn more about Person to Person payments as well as all of the cool features available to help you make paying your bills e-z.

Take it e-z with our new online bill pay. And, by the way, it is free.
Just another great reason why, if you haven’t already, you should make the switch to riverset.