Should I keep money in savings, checking, open a CD? Does it matter? (Credit Score purposes)

[mikethewxguy]

Hey gang...

Trying to find out if it matters much if I keep money ($25-$30k) in checking (0.90% APY), savings (0.90% APY), or by opening a 6 month  (or perhaps longer) CD (1.15% APY).

This would be strictly for credit score reporting...I understand that a CD would give me a better return in the long run   But I am really trying to boost my score as much as possible in the next 6 months.

I guess my main concern is if banking accounts such as: Checking/Savings/CD's are even reported to the credit scoring agencies? If so, where should I stick the money now?

My main banking is with USAA - and any future loans (Auto/Mortgage) will more than liekly be with USAA or PenFed (where I have an emergency savings account that I just recently opened).  I just do a small deposit of $100 a month to it for anyhting that might come up down the road. I do not plan on ever using it though.

Thank you for your time!

[Anonymous]

Hi Mike, and welcome aboard!

Your checking and savings balances will not impact your FICO scores, because they're not reported to the credit bureaus. So, where to park your savings will be a purely financial decision-- the best APY return for your money.

What you will find on your credit reports are revolving (credit & charge cards), installment (mortgage, auto, student, etc...) loans, and the likes. 'Baddies' (lates, charge-offs, public records, collection accounts) are reported too. Read Tuscani's credit scoring 101 thread in my siggy-- it's a great place to get started on understanding the ins and outs of credit scoring.

[MarineVietVet]

Have you thought about an online savings account? There are many out there and depending on the size of your deposit you can get much higher returns than .90% Just do a search for "high yield online savings".

Time can heal all wounds and a low FICO. 

[Anonymous]

CCCU has a kingdom builder CD at 3.74%.

[Anonymous]

As the others noted, this will not help boost your FICO score. Instead choose something that gives you the best yield and also the most flexibility.

Personally I do not like my funds being tied down to a CD.  A .20% difference isn't enough to keep me anchored down, unless you have a no penalty CD for taking funds in/out as you want.

You might check around at your local banks and/or credit unions.  A few months back a local bank was offering 5% return on their CHECKING accounts up to $10k in funds.  Conditions were simple, it was part of their "green" plan to reduce paper so you had to 1) obtain all statements online vs. having mailed statements and 2) make a minimum of 3 debit transactions per month on the account.  I haven't seen their signs in a few weeks now so I don't know if they are still offering but I thought it was a great plan for a great rate return & maximum flexibility.

[Anonymous]

If you want your savings to help your FICO/CR, then look into a good secured card that pays reasonable interest and will result in a revolving CC tradeline being reported.  Double benefits from your savings.  Otherwise, savings doesn't help your FICO, though it may influence the financial institution in loan decisions due to your liquidity.