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Need help understanding this

Frequent Contributor

Need help understanding this

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.
4 REPLIES
Moderator Emeritus

Re: Need help understanding this

CFLs have a small negative impact but the positive impact due to the length of history can help your FICO more. YMMV. If it is among your oldest accounts and/or older than your AAoA then I wouldn't touch it.

Frequent Contributor

Re: Need help understanding this

I'm new so what is YMMV and AAoA?
Moderator Emeritus

Re: Need help understanding this

Welcome to the forums!

I'd suggest reading the following:

Common Abbreviations

Credit Scoring 101 - great for knowing what is in your credit score and to see how your score is impacted.

What Steps Do I Take - great for learning the repair process.

and Example letters - PFDs, GWs, DVs, etc.

 

YMMV = Your Mileage MAy Vay

AAoA = Average Age of Accounts

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Moderator Emeritus

Re: Need help understanding this