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Certificate of Deposit loan?

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tri3nity
Contributor

Certificate of Deposit loan?

How does a cd report? Will it help my score to take out a secured loan on my cd?

Starting Score: 1/2011 TU 539 EQ 481
Current Score: 2/2011 TU 542 EQ 489 EX 505
Goal Score: 620+


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4 REPLIES 4
RobertEG
Legendary Contributor

Re: Certificate of Deposit loan?

A CD in and of itself does not report at all.  Saving assets are not reported to FICO.  If you take out a loan using the CD as security, it will post as a secured installment loan if it has a fixed loan balance with fixed terms.
Message 2 of 5
tri3nity
Contributor

Re: Certificate of Deposit loan?

Maybe the question wasn't worded properly. That's what I meant, I'm thinking of taking a loan out on my cd to get a new laptop for school. Installment loans don't really help your score I hear. Thanks for the reply.

Starting Score: 1/2011 TU 539 EQ 481
Current Score: 2/2011 TU 542 EQ 489 EX 505
Goal Score: 620+


Take the FICO Fitness Challenge
Message 3 of 5
RobertEG
Legendary Contributor

Re: Certificate of Deposit loan?

Hi tri3nity.
How much an installment loan helps is very dependent upon your credit history.  If you already have an active install loan, it wont help much.  However, if you dont, it will improve your credit mix.  Potential creditors, particularly in a manual review of your CR, like to see a mix of your payment history on both revolving and installment.
Payment history counts on both, but %util levels on installments are not that important.  Getting a new TL will also reduce your avg account age, so it is not a one-category consideration.
I would approach getting a new installment loan as financial decision rather than a FICO decision.  If you need the loan, get it, but not simply for FICO reasons.
Message 4 of 5
tri3nity
Contributor

Re: Certificate of Deposit loan?

Okay, I have a student loan on my credit that is deferred until 2010, is that counting in my utilization right now?  It's an installment loan. And the answer to your question is yes, I need a new laptop, so I'm gonna get the loan anyway. I was just trying to find out if It would help or how if reflects.

Starting Score: 1/2011 TU 539 EQ 481
Current Score: 2/2011 TU 542 EQ 489 EX 505
Goal Score: 620+


Take the FICO Fitness Challenge
Message 5 of 5
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