Rebuilding Your Credit

[princechristian]

Does anyone have any information about a CD account that can be taken out in your name where you borrow the money for it from the bank that issues it, and they report your monthly payments to bureaus. Is this something worth getting in your opinion?

[bettercreditguy1]

Perhaps you mean taking out a personal loan, placing the money in a savings or checking account, and then setting up automatic withdraws/payments to pay the loan off? This can be done. All you will need to do if you qualify is to deposit additional funds in the savings/checking account to cover the processing fees and interest. At the payoff point, you then have several months of reported payments and a new positive trade reporting.

[princechristian]

Well thats sound good as well but I meant a CD account specifically. I have read several 'old' articles about this when I google it but have not seen anything on here concerning more info or anyone who has experienced it.

[polarbeardad]

That was an older method people used to build credit frequently called a secured loan. In today's economy most banks are interested in certificates of deposit (CD) for the small amounts you would be looking for. A bank here does sort of the reverse in that you get a loan where the payments get posted to a savings account so at the end of six months to two years you have a brand new installment loan reporting along with a savings account full of money, sort of a forced savings plan. You might check with a small local bank or credit union as the rates and fee will be lower. Good luck.