Re: What are consumer finance accounts?
03-03-2012 08:43 AM
"Consumer Finance Accounts" according to FICO, and probably other scoring systems, are NOT the normal CC, Auto Loans, etc.
Example would be a furniture store might offer a customer the ability to buy $5,000 worth of furniture but the person wouldn't have a CC that could handle that purchase. The furniture store might have an account with a "Consumer Finance Company", like GE Capital. The customer fills out an application that goes to GE Capital. The customer might pay a high interest rate or the store might underwrite part of it so the customer doesn't see the high rate.
Payday loans, and other extremly high interest loans are other examples.
There has been some posts lately about Home Depot card being listed as "consumer finance", including mine. It doesn't seem to quite fit the catagory.
+1. And it is difficult sometimes to know how your accounts are classified, whether they are consumer finance revolving account or revolving accounts can be difficult to determine.
But the good news is that from a FICO scoring perspective, the consumer finance scoring ding is relatively minor.