Consumer finance campany

[Anonymous]

Why would a consumer finance company negatively impact my credit score, when in the past it had no bearing on it. This account has never been late and was paid off years ago. Would going from the low 600’s to over 680 put me in a different bracket for scoring?

Thanks,

Richard

[guiness56]

A consumer finance loan account can negatively affect your score because these accounts often carry high interest rates which may hamper your ability to repay and which many lenders view negatively. However, when paid on time, these accounts can also have a positive effect on your score.

[Anonymous]

If you start with a store card and then add a bank card, a car loan, and a mortgage, each of those has a positive effect on your score in the "mix of credit" section. However, having a tradeline coded as a consumer finance company is kinda considered a step backwards. Many people have them at one time or another to take advantage of "0% for 12 months" furniture store offers or similar. Other people may use them for personal loans. Ideally, you pay them off, let them close, and they'll eventually fall off. In the meantime, the score ding is very minor. The score ding has always been there, but as your credit gets better, Fico has to dig deeper to find any negative "factors", and this is probably the first time "consumer finance" made it up to the reason list ...