CONSUMER FINANCE ACCOUNTS LOWERING SCORE

[HYPASS33]

Below is what Myfico is saying that has lowered my score. These accounts are close and over 7 years old and all are paid as agreed. Should I get these deleted? I will affect my length of history deleting as well??

You have a consumer finance account on your credit report.

Number of consumer finance accounts on your credit report
5 accounts
Only 12% of FICO High Achievers have a consumer finance account.
Consumer finance companies typically grant loans to people with poor credit histories. Their customers often cannot get loans from traditional lending companies such as banks or credit unions. These are often high-interest loans because the consumer finance company is assuming more risk by lending to people with less than perfect credit.

The fact that you have a consumer finance company loan on your credit report means that you represent a higher risk to lenders than someone with no consumer finance loans. Even if this consumer finance account is closed, it will still lower your FICO score. However, its impact on your score will lessen as time passes.

[myjourney]

Some consumer loans are looked at as high risk such as payday loans. Any loans like those would in fact pull down your scores. With time and other TL's the mix of creditors will offset that somewhat

[HYPASS33]

They are closed accounts so should I try to have them deleted?

[andydallas1]

what would they consider consumer finance loans,,I saw that on my report, and I don't have anything that would be close to consuer finanace,,the closest would be  best buy card, or I got a GE/Discount Tire card to get free financing on some tires,,,other than that it all lines of credit/Visa/MC/mortgages/etc

[ABuckNow]

Do you have any student loans?  MyFico.com doesn't handle them correctly on my EQ CR.

It calls them Consumer Finance Accounts.

"Known defect" is what they told me when I called.

[FinStar]

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@HYPASS33 wrote:
They are closed accounts so should I try to have them deleted?

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Since they are not in dispute and accurately reporting, they cannot get deleted.  By FCRA standards, even if the TLs are closed, they still have to meet the maximum reporting CRA guidelines, which usually tends to be approximately 10 years from when those TLs were reported as closed either by you or the lender/finance company.

[ABuckNow]

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@HYPASS33 wrote:
They are closed accounts so should I try to have them deleted?

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You said they're old (7+ years) and were in good standing.

Without more information, my guess would be that they are helping your AAoA and credit history length.

Closed accounts are generally reported for 10 years from the date it was closed.  This means if you had a consumer finance account open for, say, 5 years; and it was closed, say, 9 years ago; this gives you 14 years = a very good thing probably, unless you have a lot of other old/older accounts.

I'll ask again, are these actual consumer finance accounts?  (ie do you recognize them?)  Or are they student loans?  it's a known issue with MyFico.com that it will sometimes report student loans as CFA's - but this doesn't affect your actual score.  I ask because student loans aren't considered a negative like CFA's can be.

Provide us more info and we can help more 

[Anonymous]

I contacted them and they pretended to not know what I was referring to and blamed it all on EQ.  Did they give you any insight on this "known defect" and whether they planned on fixing it?  It's illegal to have an innacurate reporting of your credit report which lenders can pull.

[Anonymous]

ABuckNow are you a MyFICO customer service representative?  If it is a known issue that MyFico.com is reporting student loans as CFAs then why aren't they fixing it or issuing some disclaimer that this is the case?  When I contacted them today (been calling for the past two weeks go get them to fix it) they blamed the reporting on Equifax and took no responsibility for a glitch.  This could result in a class action because in the analysis it says it is lowering my score.  

[llecs]

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@Anonymous wrote:

ABuckNow are you a MyFICO customer service representative?  If it is a known issue that MyFico.com is reporting student loans as CFAs then why aren't they fixing it or issuing some disclaimer that this is the case?  When I contacted them today (been calling for the past two weeks go get them to fix it) they blamed the reporting on Equifax and took no responsibility for a glitch.  This could result in a class action because in the analysis it says it is lowering my score.  

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It's not a myFICO or FICO issue. I'm guessing you are the OP? Using OP's example of a reporting CFL, Consumer Finance Loans are high-risk loans  and include lenders like the former CitiFinancial Wells Fargo Financial, the former Beneficial Financial, payday loans, and others. Lenders see these loans as a risk. They see it as a risk because the borrower was eager (then) to get approved for a high-rate, high-fee loan as opposed to going through a personal loan from a traditional lender. Because of the risk, FICO will ding you for the mere presence of one reporting regardless of whether it was opened or closed. Now the ding is very minor. In the case of OP the age of the TL could very well help more than the baddie hurts. There are some in here who have GW'd or disputed the closed TL only to see a FICO drop because the age helped. And it's not a glitch. They hurt because of what they are just like CAs hurt or lates hurt, albeit not at the same level.