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When Buying A CD Dings My Credit Score

magnifying glass over a credit score imageAs an inveterate rate-chaser, I’m always seeking attractive new CD deals.

When, however, one pops up at a credit union to which I don’t already belong, I have to think twice – and consider the consequences of a possible “hard” credit pull.

In my experience, the typical credit union is far more likely to perform a hard pull on a new depositor than the typical bank.

A hard pull is a notation on your credit report that is made when someone requests your credit file.

The principal downside of the hard pull is that it can lower your credit scores a few points at the major credit bureaus.

Even if you’re only depositing money at – not borrowing or otherwise receiving any credit from – the institution!

Not every credit union at which I’ve applied for membership has done a hard pull on me (for example, Andrews Federal didn’t), but I believe a majority have.

And I’ve noticed that my Experian score gets dinged periodically, undoubtedly as a result.

Recently, I encountered a twist on the hard pull problem when I applied online to join San Diego County Credit Union, which had just posted a 2.05% APY rate for jumbo IRA CDs.

I qualify for membership as a resident of Riverside County, Calif.

Looking to open an IRA CD there with funds available in March, I sought to minimize future paperwork hassles and delays by joining in advance and establishing a small IRA savings account.

But SDCCU put me on hold, informing me that it “was not able to approve your application at this time” because of an “address or identification discrepancy.”

It seems my hard credit pull at Experian showed me having three addresses, all on the same street, but with different street numbers.

An SDCCU officer told me I either had to present ID at a local branch (the nearest is 90 miles away), or mail in a new application with notarized ID documents.

Right now, I’m doing neither, waiting until March to decide.

Fortunately, the SDCCU credit pull is valid for 90 days, and a new one won’t be required if I reapply in March.

In truth, I repaid my last mortgage loan in 1990 and haven’t had any borrowing or revolving credit arrangements anywhere since.

Nevertheless, in this uncertain world, you never know when you’ll need good credit scores.

Besides, I hate to see mine needlessly degraded by my thrifty habits.

Particularly when the hit is caused by a futile attempt to join a credit union.

Can’t they identify me some other way – and just take my money?

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  1. GBS said:
    on February 12th at 09:47 am

    If you paid off your last mortgage in 1990, then your need for credit is probably not very high. Further, because of your “thrifty habits”, your credit score is already about as good as it’s going to get. Because your blog revolves around finding yield for money you already have, the chances of you needing to test the limits of your credit worthiness seem remote. The relatively small and transitory effect of a credit union checking on your credit history is something that really doesn’t matter in the larger context of finding the best possible ROI.