Certificate of Deposit (CD) and my credit (FICO) score?
I want to get a 1 year cd (certificate of deposit) but there is a slight chance I may have to withdraw early. Question # 1 Will it affect my FICO score ( credit score) if I need the money and must withdraw it early ? Question # 2 Will I have a bad repuation with the bank IF I withdraw it early? If there is any chance that it will affect my FICO score (which is now 795) then I will not get this CD. I never do anything that might lower my FICO score. It is 3.50 % APY cd ( $ 1,000 min. ) for 1 yr offered by my credit union. I want to deposit around $ 3,000 or so, and I am about 80% sure that I can leave the money there for the full year.
Public Comments
- I don't think it will affect your credit score at all. As for a bad rep with the bank....they will charge you a penalty, so I don't think they will be too upset! If you are really not sure though, why not get a money market account instead... you can probably find one that's paying about 2.9%. With the amount of money you are putting in, it won't really make that much of a difference and will be penalty-free.
- A early withdraw on your CD will not affect your FICO score. If you do withdraw early you will be charged a fee. Have you looked at intro rates for a shorter term? Some intro rates for 5-6 months are better than a 1 yr rate. That way you won't have the money tied up for a yr. and you can always renew after the intro term.
- I'll answer the questions in the order that you asked. Question #1: Being that this is an investment product, and lending isn't required, so your FICO score isn't involved. Penalties for early withdrawal may be involved. Question #2: People withdraw early all the time, that's why early wihdrawal penalties are charged. The bank doesn't care why you're withdrawing, just as long as you know that an early withdrawal penalty will be assessed.
- I'm an expert on this, I would suggest you take a tour here,there are expert's tips there.http://credit-score.onlinebestoffer.info/credit-score-explanation.html
