topic Re: Certificate of Deposit loan? in Rebuilding Your Credit

Certificate of Deposit loan?

tri3nity — Tue, 12 Aug 2008 01:42:41 GMT

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

Re: Certificate of Deposit loan?

RobertEG — Tue, 12 Aug 2008 01:52:47 GMT

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.

Re: Certificate of Deposit loan?

tri3nity — Tue, 12 Aug 2008 01:57:11 GMT

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.

Re: Certificate of Deposit loan?

RobertEG — Tue, 12 Aug 2008 02:50:46 GMT

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.

Re: Certificate of Deposit loan?

tri3nity — Wed, 13 Aug 2008 00:21:54 GMT

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.