What to do?

[jeeplvr97]

I purchased bedroom furniture in June of 07 applied for a card w/ 12 months no interest. I will pay off the balance this month. I will not use the card again. Should I keep the account open to get a longer acct history or close the account?

Thanks for any input.

Also my score has jumped up and down recently. Went up to 654 in Feb, Mar upto 660 (applied for a small personal loan) now went down to 653. Is this normal?

[llecs]

Check your card. Some furniture store will setup accounts under a loan type called a consumer finance loan (CFL). These are bad for FICO scoring and can even continue to damage your score long after you close the card. Other examples include CitiFinancial, Beneficial, etc.

Check on your FICO report. Look for anything in the account that might indicate a CFL or on pages 2-3 which lists bad things happening to your account. See if a CFL is listed as a reason. If not, you are in the clear and I'd keep it open. I'd probably use it once every 6-9 months or so to buy something small.

Score jumps are perfectly normal. I tried to access my SW history, but in this month alone, I think I started with 636 on EQ. On the 6th it hit 644. Then to 636 again around the 8th. Then to 644 again around the 10th. Then back to 636 on the 12th. Then today, the score closed at 644. It's a fun rollercoaster ride!

Maybe yours went up because of improved utilization or history. Applying for the loan probably had no impact. And it dropped either due to utilization or due to the loan reporting to your CR.

[jeeplvr97]

Thanks for the reply. The card is a gemb home design card issued to my name but under that has the name of the furniture store I purchased from. There is not MC or V logo on card. It is not a national store and I won't use the card again. So with all that being said do you still think I should keep the account open?

Thanks

[llecs]

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jeeplvr97 wrote:

Thanks for the reply. The card is a gemb home design card issued to my name but under that has the name of the furniture store I purchased from. There is not MC or V logo on card. It is not a national store and I won't use the card again. So with all that being said do you still think I should keep the account open?

Thanks

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You should be OK if it doesn't say "...financial" anywhere in your reports. Other examples of CFLs include Citifinancial vs. Citi or Wells Fargo Financial vs. Well Fargo, etc. If not a CFL, it is a regular store card and that should help in your mix of credit. 

[thevariable]

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@llecs wrote:

Check your card. Some furniture store will setup accounts under a loan type called a consumer finance loan (CFL). These are bad for FICO scoring and can even continue to damage your score long after you close the card. Other examples include CitiFinancial, Beneficial, etc.

Check on your FICO report. Look for anything in the account that might indicate a CFL or on pages 2-3 which lists bad things happening to your account. See if a CFL is listed as a reason. If not, you are in the clear and I'd keep it open. I'd probably use it once every 6-9 months or so to buy something small. 

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What exactly is a CFL and WHY is it bad for FICO scoring?

[llecs]

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thevariable wrote:
What exactly is a CFL and WHY is it bad for FICO scoring?

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I don't know why it is bad. I understand that payday loans are lumped in the same category which are bad, but I don't know why furniture stores would be considered CFLs as well.

Here's some more info:

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&thread.id=15325&view=by_date_as...

http://ficoforums.myfico.com/fico/board/message?board.id=ficoscoring&message.id=11371&query.id=79273...

[Anonymous]

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jeeplvr97 wrote:

Thanks for the reply. The card is a gemb home design card issued to my name but under that has the name of the furniture store I purchased from. There is not MC or V logo on card. It is not a national store and I won't use the card again. So with all that being said do you still think I should keep the account open?

Thanks

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IMO, unless it is a CFL or costs you to keep it open (an AF or membership) then keeping it open can only help you.  Use it once every 6 months for $20-30 (make this a gift for someone of a 'house' item) to keep it active and get the gift you need.  My JCP is now relegated to this duty (no CLI so I'm off to Nordstroms).