Too many accounts?

[Anonymous]

First of all, Thanks to everyone for their input.

How would I know if these were considered "consumer finance loans"

I went to myFICO scorewatch and clicked on "Understanding Your Score". It gives me the things hurting my score but doesn't say anything about consumer finance loans. However, when it shows me my credit "overview" it puts the balance of these loans under "Installment Loan Balances"

I also logged into TC and checked. They are listed under Installment Loans. When I clicked on "Credit Score and Analysis" it list the factors hurting my score. It doesn't say anything there about consumer finance loans.

Is there another place I could find this out?

It is crazy that they'd hurt, regardless of the interest rate or who gave you the loan, you are demonstrating your credit worthiness by paying it back and on time each month. Right?

What I found interesting is that my credit history length is one of the factors hurting my score. It is 6 years. They say that FICO High Achievers have a 19 yr credit history on average. You can not obtain credit until 18, correct? So until you are 37 you could not have a 19 yr history. You are being punished in a way for being too young to have a lenghty history.

Until I got married, age 26, I always worked for what I wanted and paid cash. Never had CC or anything. This is when I got my first loan, from Ford. I am 32 now, I wont have a 19 yr credit history until I am 45.

It also said my average age of accounts is 1yr. How is this determined?

Thank you all.

[Anonymous]

In the truest sense, they are installment loans and are listed as such on my FICO. What is listed under factors hurting your score is listed in order of importance and it wll only give the top three or so.  Since I have low utilization. No recent derogs, of the things on my report the CFLs are one of the top factors hurting my EQ score.

Not sure why you are penalized for having them when they are paid as agreed from start to finish but you are. Hopefully, you are right and they are not going to show as consumer finance.  There is no special category for them, just how the lender is coded.

See why it REALLY makes no sense.  If your's are reported as non CFL and mine are and its the same type of loan structure, why should on person be penalized and the other not?

[Kooliad]

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Brammy wrote:

Sidewinder

Here is a quote from the top three reasons that my score is what it is.  Keep in mind this is my longest history but the lowest score. Even thouh I have derog student loan information reporting onthe other two.  From your description it seems these are the same types of loans you are talking about.  I don't think its fair that a loan paid as agreed can hurt your score nut there you have it.  BTW the one with more recent student loan derogs but without these typesof loans and a good deal shorter history is over 40 points higher than this one.  Equifax also has an additionl 10k student loan PIF.  They do damage, I can't stress that enough

You have a consumer finance account on your credit report.

According to your credit file, you have 7 consumer finance company loans. Only 12% of FICO High Achievers have a consumer finance account.

Wow had to edit that out it actually pulled up my credit report..lol

Why does
this matter? 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.

Message Edited by Brammy on 09-08-2007 06:26 PM

Message Edited by Brammy on 09-08-2007 06:30 PM

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Thanks BRAMMY I didn't know that I haveone on my CR I will try to get it off and see if my scores go up any.Thanks

[Anonymous]

If they are anywhere near the oldest accounts leave them alone.  It is likely to do more damage than good by reaging your credit file

[BeatingtheSystem]

Brammy -

I appreciate all the info you provide and would appreciate clarification on something:  Are accounts with HSBC considered personal finance loans?  Thanks in advance.

[Anonymous]

I liked the idea of my banker suggesting I get an installment loan from my bank. I put in money into my saving's to secure the loan. She did a 2 year term, but told me to pay on it for atleast 6 months for it to have an effect on my scores. Of course I can pay it off any time after that to release my funds.

I was told by a friend who owned a finance company, that to help build my credit, she would do a loan for me. I was 20 and didn't know any better. Now, I know she wasn't helping me much! Not to mention the fees were less than desirable.

Have you tried looking into getting a secured cc? I got one through BOA and I love it. I should of took all the money I wasted on fees for those subprime cards and just put it into this one. But that was then...

[Anonymous]

I agree with Stef37. BOA fully secured card worked wonders for me. They unsecured after 12 months and I got my deposit back weeks thereafter.

You can easily increase your credit limit by depositing more money in your account and when they graduate you to unsecured they tend to give you a higher CL than what you had on your secured card.

[Anonymous]

Hi sidewinder.

MyFico is good for identifying Consumer Finance. You are probably ok if MyFico has not listed any items as such.

Installments and terms. You need a certain amount of months before points from history seems to help. More history = better (to a point). I would focus on keeping 1 installment for maybe a year -vs- opening many. Having a few -vs- a whole lot might gain you the same results. Sounds like you probably already have more than enough. But if you don't have any with history I would open 1 more installment and keep it for a full 12 months.

What you really need is some credit cards. They count BIG TIME! It takes 6 months before you start to really see score jumps with CCs. Open them and keep them forever unless costing you fees. If costing you fees hold them for at least "minimum" 6 reporting months; 12 months I strongly recommend before thinking of canceling any credit card. Secured are just as good as prime for jump starting credit.

And finally and most important, repair is so many times better than adding good stuff. Put all efforts to GW and PFD for newer things that went bad. It is easier and faster to fix than to rebuild in many cases.