topic Samsung Financing dropped Credit Score in Understanding FICO® Scoring

Samsung Financing dropped Credit Score

Anonymous — Wed, 02 May 2018 14:36:11 GMT

I didn't do my research and I thought applying for Samsung Finance would help my credit score as long as I kept the balance paid.

It dropped my score by 39 points... is there anyway to reverse this? Pay it off, Close it? I guess those 39 points are gone now...

https://imgur.com/a/TTRtySo

Re: Samsung Financing dropped Credit Score

Anonymous — Wed, 02 May 2018 14:58:14 GMT

Highly unlikely that adding that new account dropped your score almost 40 points. There may be something going on that cause that score drop, but when my fico sent the alert about the new account they provided you with current score. Something may have happened with your report that didn't trigger a my fico alert originally.

Re: Samsung Financing dropped Credit Score

Anonymous — Wed, 02 May 2018 15:05:07 GMT

What you applied for is almost certainly a Consumer Finance Account (CFA). The mere presence of a CFA hurts your score, even if you have perfect payments on them.

There are many discussions of CFAs here on the forum:

https://www.google.com/search?client=firefox-b-1&ei=49HpWqTDIZDAzgLwhqr4CA&q=consumer+finance+account+myFICO&oq=consumer+finance+account+myFICO&gs_l=psy-ab.12..33i160k1l2.21874.26936.0.30470.8.8.0.0.0.0.94.602.8.8.0....0...1c.1.64.psy-ab..0.8.594...0j0i67k1j0i7i30k1j0i30k1j0i5i30k1j0i22i30k1j33i21k1.0.vDPT-668w88

I suggest you read through a few of them and you'll learn a lot more.

If you decide you want to help other people out on this thread, there's a bunch of questions I'd like to ask you. I can't promise how much (if any) of the damage we can help you repair, but carefully watching you do the right things (as you try to fix it) in a controlled way will help us undertsand CFA impact better.

Re: Samsung Financing dropped Credit Score

Anonymous — Wed, 02 May 2018 15:09:18 GMT

PS. I agree with CreditAddickt that there may be something else responsible for some of that score loss. That would be part of the reason I'd be asking some more questions. I have several in my hip pocket, but no point in me listing them if you'd rather not pursue this with us.

Re: Samsung Financing dropped Credit Score

Anonymous — Wed, 02 May 2018 16:01:17 GMT

Entellex ... not of much comfort but, I applied and obtained a Wells Fargo Visa Bank Card from a Wells Fargo Financial Center Store with a $2,400 CL. Unknown to me ... I found out later that my FICO Score dumped about the same number of points as yours. Turns out the Credit Card I obtained was considered a "Consumer Finance Account." Could not figure out what was going on ... knew nothing about the affects of Consumer Finance Accounts. After learning more I knew it was on my report and I was going to have to live with the points lost until I could build up my credit report. Today the card still shows on my report but is not affecting it. Who was to know? I sure didn't. Lesson learned!

Re: Samsung Financing dropped Credit Score

Anonymous — Thu, 03 May 2018 01:07:37 GMT

Going off of Dino's data point above, it sounds like the OP losing roughly 40 points from the addition of a CFA is completely possible. It's worth mentioning that with a net loss of 40 points, not all 40 points are due to it being a CFA. Just any regular old account (non-CFA) being added can sometimes drop a score say 15-25 points due to the reduction of age of accounts factors and the inquiry. The amount of the drop though depends a lot on specific profile, where things like file thickness play a big role. All that being said, the introduction of the CFA as a scoring factor in and of itself is likely impacting score more to the tune of 20 points.

Re: Samsung Financing dropped Credit Score

Anonymous — Thu, 03 May 2018 08:24:56 GMT

BrutalBodyShots points out a realistic score hit. When our credit files are in the lower FICO Scores and we are building or rebuilding it seem that the credit files are more sensitive to the many aspects of of the credit scoring system. My file was thin and had left overs from a BK drifting through it. At the time it seemed virtually any activity caused swings. The CFA was a total shock and other things were going on so the 20 points seems more on track.

Re: Samsung Financing dropped Credit Score

Anonymous — Thu, 03 May 2018 21:48:43 GMT

@CreditGuyInDixie, sure ask as many questions as you'd like. I am willing to share some information to help others as well as myself.

Thanks everyone for the input. I am pretty new to myFICO, so maybe I am not reading or understanding the alerts. Within a short period of time I did apply for several things... because I was excited that I improved my credit score. I didn't really see anything else that I applied for popup on my account though, just a few inquiries. I will share what I applied for very recently and what my alerts look like. As soon as I got approved for my Chase Credit Card, I went for Samsung and two cards that I've always wanted.

Chase Freedom Unlimited (Approved)
Samsung Financing (Approved)
Discover Card (Approved)
KOHLS (Approved)

Here is a screenshot of my previous Fico Alerts. It doesn't even show Chase/Discover/Kohl being added as accounts, just the Samsung; I now have both Chase/Discover cards in my wallet.

FICO ALERTS

I guess my score is going to be in a world of hurt after all I just did... Have mercy on my credit score soul...

Re: Samsung Financing dropped Credit Score

Appleman — Fri, 04 May 2018 21:54:54 GMT

The good news is that with time and maintaining low utilization you will see the score climb back.

You have multiple factors that are likely making your scores take a dive.

How is your Credit Card utilization?

Thanks for sharing, it will take time, low reported utilization and a continued perfect payment history to see the score climb back.

Re: Samsung Financing dropped Credit Score

Anonymous — Fri, 04 May 2018 22:30:59 GMT

I also have 3 older cards I don't really use.

I only have about $80 on my Chase and still the 300 balance on that samsung financing account

Re: Samsung Financing dropped Credit Score

Anonymous — Sat, 05 May 2018 13:52:20 GMT

@Anonymous wrote:
I also have 3 older cards I don't really use.

I only have about $80 on my Chase and still the 300 balance on that samsung financing account

I would certainly pay off the CFA account, close it, and resolve never to open a CFA again. Even better might be to call the creditor, cry a lot, tell them you are trying to buy a house and the account's presence caused your score to take a big dive, and would they please be willing to delete it altogether from your report -- it was a complete misunderstanding opening it in the first place. As long as you still have money on it they might be willing to agree to a pay-for-delete arrangement.

Can you tell us more about the three cards you never use? Do they all have a zero balance? When was the last time you used them? Are they store cards or do they have a major credit card logo on them (Visa, MasterCard, Discover, Amex).

Re: Samsung Financing dropped Credit Score

Anonymous — Tue, 08 May 2018 20:25:59 GMT

I will for sure pay and try to close it. How long would it stay on my account after?

My other three cards were beginner cards, i don't use them anymore, it has been several months now. All $0 balances, except Credit One where it has the annual fee of $8 every month.

Credit One Bank (Very first)

Wells Fargo Unsecured (Grad from Secure several months ago)

Capital One

Re: Samsung Financing dropped Credit Score

Anonymous — Tue, 08 May 2018 21:55:25 GMT

An account typically stays on your report for ten years after it is closed. That's why I wrote:

Even better might be to call the creditor, cry a lot, tell them you are trying to buy a house and the account's presence caused your score to take a big dive, and would they please be willing to delete it altogether from your report -- it was a complete misunderstanding opening it in the first place. As long as you still have money on it they might be willing to agree to a pay-for-delete arrangement.

As far as the three credit cards you mentioned, I would close the Credit One since it has heavy fees associated with it. If the other two have no annual fees, I'd make a small purchase on each one every six months to protect them against being closed due to inactivity. Keeping a card open tends to be the winning move, unless it is a store card or one with an annual fee.

Re: Samsung Financing dropped Credit Score

Anonymous — Tue, 08 May 2018 22:02:23 GMT

I will contact them and give it a try.

As for closing the Credit One Bank card, would that hurt my Credit Score? I've had it opened since Apr 28, 2015 (3 yrs)

with the Wells Fargo Unsecured being opened Feb 8, 2015 (3 yrs, 3 mos)

Those are the longest opened cards I have.

Re: Samsung Financing dropped Credit Score

Anonymous — Tue, 08 May 2018 22:18:31 GMT

Age of Oldest Account is indeed an important scoring factor, but FICO considers closed accounts just as much as open ones. Thus, if you close the Credit1 account tomorrow, it will be 3 years old, and in nine years from now, FICO will view it as 12 years old.

Does the Wells Fargo card have any annual fees?

Re: Samsung Financing dropped Credit Score

Anonymous — Tue, 08 May 2018 22:46:11 GMT

I see... I guess I will go ahead and close it then.

My Wells Fargo and Capital One has no annual fees.

Re: Samsung Financing dropped Credit Score

Anonymous — Tue, 08 May 2018 23:20:11 GMT

@Anonymous wrote:
I see... I guess I will go ahead and close it then.

My Wells Fargo and Capital One has no annual fees.

Good. I'd keep those two cards open then.

Can you tell us how long it has been since you last used your Wells Fargo? Also how long has it been since you have made your last payment? Wells Fargo tends to close accounts due to inactivity sooner than do other CC issuers. Many will let you go for 12 months of inactivity (or more) but Wells Fargo has been known to close after 7 months, even if you have used it in the past a number of times.

If I were you I would use your WF every 4 months, since it is your oldest card and you don't want it closed. If 5 months goes by with no use that's fine, but don't let six months go by with WF.

Re: Samsung Financing dropped Credit Score

Anonymous — Tue, 08 May 2018 23:44:43 GMT

I think the last activity on my Wells Fargo card was Feb 2018, my last payment was Feb 2018, because I paid the full balance to get it at $0

I will try to rotate cards every now and then to maintain activity. I have autopay setup on each card, besides Credit One Bank, because they don't have the feature, another reason to close it.

Re: Samsung Financing dropped Credit Score

Anonymous — Thu, 10 May 2018 20:19:33 GMT

I called and asked about deleting it, straight up no.

I feel like everything I did to get my score up just got flushed down the toilet...

Re: Samsung Financing dropped Credit Score

Anonymous — Sun, 01 Jul 2018 02:31:25 GMT

Firstly, thank you. This entire thread has shaken this wild child up and awake tremendously. Today i learned what a cfa is and that I never want one. I also learned that I can live without the colors I havent seen on a 20k tv which led me to ask the same question as the original poster.

- oh, hi. I'm a young adult with no clue. Trying to rebuild while steering clear of cc.

As far as account age, I can concur and add that the account doesn't even have to be positive. My oldest account (5yr4mo) is closed and negative (so that's bad) but my account history aspect is very very good because of it.