It isn't that bad. And it's not so much that you will lose points, as that you won't get quite as many points as you would have if it had been a signature loan from a bank or CU, for instance.
Think of it as being a bit like a store card. A store card is a useful tradeline, but it doesn't carry quite the oomph of a bank card. In other words, all other things being equal, if you only had 3 store cards, your scores would be a bit lower than if you had 3 bank cards, but it's still useful to have those store card tradelines.
(And this is completely separate from the do-you-need-to-have-a-store-card debate.
)
Nothing changes when they're paid off. They're still there. But don't go trying to delete them. There's an excellent chance that their mere existence as a tradeline with history is worth much more than whatever negative might be associated with a CFL. This would definitely qualify as throwing the baby out with the bath water.
Essentially, if you've got them, you've got them. Treat them as you would any other loan: don't get behind, and keep them open at least 6 months, preferably 12, before paying them off. But if you're looking for financing, go to a credit union first before going with a CFL.
Think of it as being a bit like a store card. A store card is a useful tradeline, but it doesn't carry quite the oomph of a bank card. In other words, all other things being equal, if you only had 3 store cards, your scores would be a bit lower than if you had 3 bank cards, but it's still useful to have those store card tradelines.
(And this is completely separate from the do-you-need-to-have-a-store-card debate.
)Nothing changes when they're paid off. They're still there. But don't go trying to delete them. There's an excellent chance that their mere existence as a tradeline with history is worth much more than whatever negative might be associated with a CFL. This would definitely qualify as throwing the baby out with the bath water.
Essentially, if you've got them, you've got them. Treat them as you would any other loan: don't get behind, and keep them open at least 6 months, preferably 12, before paying them off. But if you're looking for financing, go to a credit union first before going with a CFL.
