@Anonymous wrote:Marinevelvet, this is what it says.....
You have a consumer finance account on your credit report.
Number of consumer finance accounts on your credit report
2 accountsOnly 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.What to do about this: You should try to stay current with all of your payments and avoid opening any new credit accounts that you don't need.
Hi OneDay,
The interesting thing to me is that 12% of FICO High Achievers Do have a CFA on their reports (and, of course, they STILL are High Achievers - i.e. they have a FICO of 760 or better - even with the CFA's reporting). DH had an EQ FICO of 804 with a CFA closed but still reporting.
Don't get me wrong - I'm not a fan of CFA's and am paying attention to what I app for because I prefer not to have any additional CFA's on my report. That being said, even with a CFA doing whatever FICO damage it does, it doesn't keep you out of the High Achievers club. And at this point, it may be helping your AAofA, and thus your score, more than it is hurting. I have had CFA's causing more damage than a handful of new accounts according to myFICO reports - so I don't discount that they can cause a significant enough ding to pay attention to them.
It's good to note that once they're closed, they cause less FICO damage as time goes along than they did when they were open.
As MVV states, this account will continue to report for approximately ten years after closing.
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ETA: In response to your comment:
are all lenders always going to know I had problems in the past and judge me for that past?
I doubt that any lenders will red flag you for having a CFA - it causes something of a FICO ding (again depending on whether it's still open and how long ago it was closed). We refinanced our mortgage last year, and the computer and the manual review had no issues with the CFA - and in fact, they're actually fairly common. Ours was from Citifinancial - which is an arm of Citi Bank. I still try to avoid them but they're not worth losing sleep over (I know - I lost a little sleep on the way to understanding CFA's a little better). 