Breaking CDs and Credit Scores

Does your credit suffer when you take money out of a CD before it matures?

There's a lot of confusion out there about how credit works.  This week, Liz Pulliam Weston explained that bank withdrawals don't hurt credit scores.

Credit is (for the most part) about borrowing money.  It's supposed to predict how likely you are to default on a loan.  If you just take money that's already yours, you're not borrowing anything.

Credit can sometimes creep into other areas of your life (such as auto insurance and employment).  However, your bank accounts generally stay out of the picture unless you make a habit of writing bad checks.

Further reading:

• What is Credit?
• Insurance Scores FAQ