Review or My Credit & Advice on Credit Union Unsecured Loan

[jessetsi]

I put this in the credit repair section because I am in the middle of repairing my credit, and I want to get some serious advice from the experts.
Here is what my positive history looks like:
1) Unsecured Credit Card with 12 months positive history, closed
2) Secured Credit Card, 3 years positive history ($600 Limit), open, 50% balance
3) Unsecured Credit Card, 1.5 years positive history ($550 Limit), open, 50% balance
4) Unsecured Credit Card, 1.5 years positive history ($400 Limit), open, 30% balance
5) Student Loan, 1 year positive history, 50% paid off
6) Unsecured Auto Loan (With Finance Company) 18% interest, 7 months positive, $1150 starting balance, $430 current balance

Negatives:
1) Repo (comes off in 2 years)
3 medical collections
1 credit card charge off (settled for less then amount owed)
1 misc collection

This is my credit, I have about a 610 score.

Now, here is my confusion. Today I was told by my credit union that I can put $2,500 (minimum) into a CD with a APY of 2.0% for 7 months or 2.5% for 14 months.
Now, the nice guy at the Credit Union said that I can take a "secured loan" against the money in the CD and determine the minimum payment and payback terms. The APR will be 3% above the APY of the CD. So 5% or 5.5%
I can borrow up to the amount in my CD. But I would probably borrow a little less.
Here are my questions:
1) Will a Secured Loan Help My credit?
2) What amount would help me the most 1,000...2,000?
3) Is there any advice, or anything I should know? Anyone with experience here?

I plan to take the "loan" and pay down all my credit cards to 10%, I would like to have the car loan for at least 12 months before I pay it off.

Thanks!

[CreditCrisis]

Jesseti:

These kind of secured loans are great at building up credit. There are two very important things to remember though;

A) Never borrow more that what you can pay back in one lump sum

B) Never use more than 30% of your available credit

So with saying that, you will have an account with $2,500 in it. if you can comfortably pay back $750 each month to the account, go for it! ($750 is the most you can borrow, 30%)

Especially in dealing with a loan of this size, if you dont pay it all back at the end of every month, the interest is going to be herendous! On your OWN money!

Plus, by only using 30% and paying that off every month, it will build your credit quickly because it shows that you dont need to use the whole balance and that you are able to pay it off. i would go for it if you can trust yourself not to spend more a month than you can pay back.

[jessetsi]

Thanks for your relpy, but I am having trouble making sense of what you are saying.
I was under the impression that I wanted to keep the tradeline open for more then 12 months to build the soild history. I dont think it would look too good on my credit if I had a new loan each month and paid it in full would it?

If I borrow 750, it is going to look like this on my credit:
High Credit limit: 750
Balanace: 750

AND THE INTERST RATE IS 5%, thats not bad at all.

Please explain in greater detail, because you are saying to do everything that I am told not to do.

[CreditCrisis]

it wouldnt be a new loan. are you looking at a product that is an actual loan; lump sum, paid in increments, or a revolving account; pay what is owed to a certain balance monthly.