Re: Credit and Credit Scores: A short lesson
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
The best way to build credit, if you have none, is to get a CD and take out a loan against the CD, paying it off, establishing credit.
[/ QUOTE ]
huh?
[/ QUOTE ]
You deposit $5000 (arbitrary amount) into a 6 month Certificate of Deposit earning 6%. You go for a secured loan at a lower interest rate (may need a cosigner). You pay off the loan, and earn some small interest in the process, and increase your credit.
[/ QUOTE ]
I think it has been pointed out already, but you will not get a loan at a lower rate. There is a spread on what interst % you are earning and what interest % you pay. My insitutions spread is 2%, so CD pays you 5%, you pay 7%.
|