topic Re: Citi Financial in Credit Cards

Citi Financial

Anonymous — Tue, 06 May 2008 22:27:14 GMT

I know that a loan from Citifinancial is not a good thing for your CR but what about the store cards that are offered through them. Im looking to get some new furniture and they have some good deals going!

Re: Citi Financial

Anonymous — Tue, 06 May 2008 22:29:13 GMT

I keep getting preapprovals from these guys for loans through local Citi Financial buildings in my area. I shred them all without thinking anything of it. Is there any particular reason it is considered bad?

Re: Citi Financial

Anonymous — Tue, 06 May 2008 22:32:14 GMT

Its consumer finance and its looked at as people who can't get regular loans and are financial in trouble are the only ones who will apply for a loan with such outrageous fees/interest. I just wonder if it carries over to their revolving lines for furniture stores.

Re: Citi Financial

haulingthescoreup — Tue, 06 May 2008 22:36:09 GMT

The loans you get through Citifinancial are CFL's (consumer finance loans), and their presence drops your score, although not much, because they are considered excessively easy to get, and supposedly are taken by desperate consumers. (So why isn't First Premiere and company treated the same way?)

Anyway, furniture store loans are often the same, although I've read that some are set up as revolving, and therefore don't carry the CFL ding. I'm not sure how this would work, because revolving implies that you can pay down part or all of your balance, and then go back for more. The furniture loans that I got back in the day were for a dining room hutch for $200, or coffee/end table sets for $100, or whatever, and so they were definitely loans, not revolving. (We weren't exactly living high on the hog back in the day! )

Barry and the other admins get an earful on this topic from us, along with rating CU and local bank cards a bit lower than bank cards from the national banks. IMO, these are two left-over risk factors from the dinosaur days, that are now ridiculous.

Re: Citi Financial

Anonymous — Tue, 06 May 2008 22:47:18 GMT

Hmm. So is there any way you can distinguish is a loan is a CFL versus a normal loan before applying?

As rating CU cards as somehow less "good" than large banks, that is absolutely ridiculous.

Re: Citi Financial

haulingthescoreup — Tue, 06 May 2008 23:48:29 GMT

@Anonymous wrote:
Hmm. So is there any way you can distinguish is a loan is a CFL versus a normal loan before applying?

As rating CU cards as somehow less "good" than large banks, that is absolutely ridiculous.

That's what is so freaking frustrating. You can't even tell on your credit report how a loan is being treated, until you get a negative on screen 2 about the presence of a CFL. There is a code on them that doesn't show on your reports, but it tells the scoring formula how to treat them.

About the best rule of thumb that we have is if the words "finance" or "financial" are in the company name, it's going to be a CFL. But that's awfully vague, and my old Honda lease was from Honda Finance, and that had dang well better not be treated as a CFL!

Again, if they want to downgrade an account for being too-easy to get, fine, but do the same for the bottom-feeder CC's.

As for CU's and local banks carrying less weight than the supposed big boys, that might have made sense in the pre-Internet days, when these were truly local financial institutions with relatively low assets. But it fries my patootie to think that the scoring formula might regard my USAA and PenFed cards as inferior to, oh, I don't know, Tribute? Applied? (And I don't know if these two are considered national banks; I'm just throwing out examples.)

You've hit two of my big grrrs. Can you tell?

Re: Citi Financial

Anonymous — Wed, 07 May 2008 00:32:16 GMT

Isn't USAA like notoriously strict on the issuance of CCs? They should count more than Capital One or First Premier.

What about companies with multiple card tiers? Do they count less also?

I'm sorry. I find that logic completely, 100 percent retarded.

Re: Citi Financial

Anonymous — Wed, 07 May 2008 10:43:26 GMT

My Citi Financial Loan through a local small office in a strip mall is reporting as coming from Citi Financial Mortage Company and is reporting as an Installment Loan on all my reports. not a Consumer Finance Loan.

Sure the Interest was higher than I would have liked but I needed the additional Trade Line of a differnt type at the time and was planning on paying out early with extra Principle payments. (Self Justifying I know its SAD...)

Then after getting some payment History established I planned on getting a personal CL with a Credit Union and paying this one off completely.

Actually having the payment history with them has opened up the door to other Citi Bank products that I would not have gotten otherwise.

I guess with the higher interest for a short time I got what I payed for.

That is a relationship with Citi Bank.

Re: Citi Financial

Anonymous — Wed, 07 May 2008 10:53:43 GMT

My furniture payment with a local Mom & Pop store showed as an installment loan on my credit report but somewhere that I couldn't see it was flagged as a CFL. One of the negatives comments when I pulled my FICO report was that I had a CFL on my report. The only other loan I had was for my car and I know that wasn't it.

Re: Citi Financial

haulingthescoreup — Wed, 07 May 2008 10:57:37 GMT

I'm afraid that HouseHunter is correct. A CFL will report as an everyday installment loan on your reports, but there's a code attached to it that directs the scoring formula to treat it differently. That's one of the many irritating things about CFL's --you don't even know for sure when you get one.

Those who get a negative comment about their presence generally don't have a lot of real negatives left. Unless you have a lot of CFL's, I would think that once this negative comes up on screen 2, that means that they're almost out of negatives for you. (Hope so for your sake, anyway!)

Re: Citi Financial

MattH — Wed, 07 May 2008 12:05:59 GMT

@haulingthescoreup wrote:
I'm afraid that HouseHunter is correct. A CFL will report as an everyday installment loan on your reports, but there's a code attached to it that directs the scoring formula to treat it differently. That's one of the many irritating things about CFL's --you don't even know for sure when you get one.

Those who get a negative comment about their presence generally don't have a lot of real negatives left. Unless you have a lot of CFL's, I would think that once this negative comes up on screen 2, that means that they're almost out of negatives for you. (Hope so for your sake, anyway!)

Here's how my only CFL appears:

CITIFINANCIAL RETAIL SVC
...
Status: Paid,Closed/Never late.
Status Details: This account is scheduled to continue on
record until Oct 2017.
Date Opened:
07/2004
Type:
Revolving
Reported Since:
07/2004
Terms:
NA
Date of Status:
10/2007
Monthly Payment:
$0
Last Reported:
10/2007
Responsibility:
Individual
Credit Limit/Original Amount:
$6,500
High Balance:
$3,887
Recent Balance:
NA
Recent Payment:
NA
Balance History:
...

Re: Citi Financial

Anonymous — Wed, 07 May 2008 12:51:17 GMT

With the negativity of the CFL hurting your score, do the points come back when you pay the loan off?

Or once it's there does it hurt for 10 years.

Re: Citi Financial

Anonymous — Wed, 07 May 2008 21:00:05 GMT

Financial services will HURT your score and it scares away quality lenders. CitiFinancial is the sub-prime lender for Citi. Another one to sat away from is American General.

Re: Citi Financial

nosxih — Wed, 07 May 2008 22:26:49 GMT

Please tell me it is not that bad. I just got a 5K loan from citi financial and I do not need any significant negative impacts on my score. It has not posted to my reports yet. It will post this month.

What kind of hit can I anticipate? say a couple of points?

I also already have an Ashley's Firn. account/card that is reporting from Citi and it does not seem to be impacting my score negativly. At least from what I can find.

Message Edited by nosxih on 05-07-2008 03:26 PM

Re: Citi Financial

haulingthescoreup — Wed, 07 May 2008 22:48:37 GMT

It isn't that bad. And it's not so much that you will lose points, as that you won't get quite as many points as you would have if it had been a signature loan from a bank or CU, for instance.

Think of it as being a bit like a store card. A store card is a useful tradeline, but it doesn't carry quite the oomph of a bank card. In other words, all other things being equal, if you only had 3 store cards, your scores would be a bit lower than if you had 3 bank cards, but it's still useful to have those store card tradelines.

(And this is completely separate from the do-you-need-to-have-a-store-card debate. )

Nothing changes when they're paid off. They're still there. But don't go trying to delete them. There's an excellent chance that their mere existence as a tradeline with history is worth much more than whatever negative might be associated with a CFL. This would definitely qualify as throwing the baby out with the bath water.

Essentially, if you've got them, you've got them. Treat them as you would any other loan: don't get behind, and keep them open at least 6 months, preferably 12, before paying them off. But if you're looking for financing, go to a credit union first before going with a CFL.

Re: Citi Financial

Anonymous — Wed, 07 May 2008 23:01:42 GMT

My auto loan is through Citi Financial Auto. Is this also considered a CFL? I haven't seen anything on my reports indicating it's having a negative impact.

Re: Citi Financial

Red1Blue — Wed, 07 May 2008 23:07:48 GMT

I am so tempted to add an installment loan from Citi Financial. I have decided to wait 6 more months and then try for Citi Flex LOC. I dont need loan. I'll wait 6 months.

Re: Citi Financial

nosxih — Thu, 08 May 2008 04:02:24 GMT

@haulingthescoreup wrote:
It isn't that bad. And it's not so much that you will lose points, as that you won't get quite as many points as you would have if it had been a signature loan from a bank or CU, for instance...

Thanks for the great explanation! That did alleviate my concern quite a bit and probably others readers too.

I do have several other accounts in good standing so I don't think this will be a great impact. (And I got a awesome motorcycle too!)

I plan to pay regular payments on this until next year. I get my annual bonus about this time next year and I will pay the balance then so it should look pretty good by then.

Maybe I can balance it off by getting a good prime card sometime in the next 6 months too. Thanks again!

Message Edited by nosxih on 05-07-2008 09:02 PM

Re: Citi Financial

Anonymous — Thu, 08 May 2008 07:09:49 GMT

Well I just got some furniture financed from American Financial and they had the best offer for me, 0% for 2 years. That's much better than what I have with NFCU/AMEX/DISCOVER/CITI/JFCU and a few others as far as what I wanted. I got my scorewatch and my FICO has not changed from before I got the loan. Don't get me wrong, my other prime cards are at a low interest rate but not @ 0% purchase. FWIW.

Re: Citi Financial

Red1Blue — Thu, 08 May 2008 09:14:21 GMT

Check your credit report and let us know if it is coded as installment loan or revolving credit. I think if it is coded as revolving credit then it might not affect your scores.

workingit wrote:
Well I just got some furniture financed from American Financial and they had the best offer for me, 0% for 2 years. That's much better than what I have with NFCU/AMEX/DISCOVER/CITI/JFCU and a few others as far as what I wanted. I got my scorewatch and my FICO has not changed from before I got the loan. Don't get me wrong, my other prime cards are at a low interest rate but not @ 0% purchase. FWIW.