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Wells Fargo Financial National Bank

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Anonymous
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Re: Wells Fargo Financial National Bank

I'm curious as to why a CFA hurts a credit score? If it does then I'll rethink my plans

Message 11 of 14
Anonymous
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Re: Wells Fargo Financial National Bank


@Anonymous wrote:

I'm curious as to why a CFA hurts a credit score? If it does then I'll rethink my plans


CFAs historically have been the easiest form of credit to obtain. Back in the day, they were sort of viewed as "last resort" financing, when people couldn't qualify for a credit card on their own for example.  As a result, they're viewed adversely by the FICO algorithm and many people have reported CFAs negatively impacting their scores for years.  The kicker to me is that they continue to adversely impact your scores even after the account is closed and we all know that closed accounts stay on your credit report for another 10 years.  For those that use monitoring software, many have reported negative reason codes stating something along the lines of, "Presence of a consumer finance account," which clearly means that FICO doesn't like seeing them.

Message 12 of 14
Anonymous
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Re: Wells Fargo Financial National Bank

Thanks for the input. I think I'll steer clear of that type of credit. I have worked so hard to rebuild my credit.

Message 13 of 14
Anonymous
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Re: Wells Fargo Financial National Bank

Sounds like the smart move during a rebuild.  No one can say for sure how much a CFA may adversely impact a credit profile.  It could be a few points; it could be 10.  There's no way to know for sure.  What we do know for sure though is that during a rebuild, every point matters.  Once you achieve your credit goals and have 800+ scores maybe a CFA wouldn't be such a big deal, but I'd avoid them whenever possible.

 

It's pretty easy to avoid them too if you think about it, as aside from a 0% offer they really don't have any perks or benefits over a CC (assuming you can't get a 0% promo card).

Message 14 of 14
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