topic Re: I have the dreaded Consumer Finance reason code... in Understanding FICO® Scoring

I have the dreaded Consumer Finance reason code...

Anonymous — Mon, 28 Jan 2019 06:49:41 GMT

So I just noticed my TU mortgage score has the dreaded CFA reason code.

This is INFURIATING! I took out a personal loan through Best Egg for no other reason than to HELP my credit by satisfying credit mix and now I will have this black mark for 10 years! Paid in full and hurting my score. Wonderful!

How many points are these worth? It’s just a single one, I can’t imagine that it’s *that* damaging but this pretty much kills my dream of seeing 800s next year when my BK falls, that’s for sure. I’m guessing I’ll be looking at 760-770.

I am so furious right now! There’s never any warning about these products! I guess I will get to keep Pikaboo company 🤬

Re: I have the dreaded Consumer Finance reason code...

Revelate — Mon, 28 Jan 2019 13:17:53 GMT

Welcome to my world, did the exact same thing 7 years ago and whoops.

Moral of the story if you're just trying to improve credit for mix or SSL just get a loan from a CU.

That said, a CFA doesn't appear to be a score killer compared to some other things. Can see my max scores in my signature and that was with a CFA as the only blemish on EQ / EX... and actually I'm at an 827 EX FICO 8 and probably will be 780+ on EX FICO 2 as soon as my HELOC reports $0, so really the CFA is irrelevant to actually getting underwritten from a scoring perspective.

We don't really have much data in terms of how much they actually count unfortunately, if I'm still around in another ~3.5 years I'll try to capture a good before and after on all scores, but that's a long way and really it's irrelevant compared to the rest of the dirt on EQ/TU apparently looking at the EX scores.

Re: I have the dreaded Consumer Finance reason code...

dynamicvb — Mon, 28 Jan 2019 13:34:59 GMT

Not to hijack, but I've been thinking about this lately. How can you tell if a particular company would be considered an CFA? I've been getting a lot of pre-approvals for companies such as Prosper, LendingClub, etc. and I've considered doing a personal loan for some home repairs. I've just been worried they would show up as a CFA and I don't want that as I want my scores to keep going up. Is there any way to tell if one would be coded like this?

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Mon, 28 Jan 2019 14:57:25 GMT

@Revelate wrote:
Welcome to my world, did the exact same thing 7 years ago and whoops.

Moral of the story if you're just trying to improve credit for mix or SSL just get a loan from a CU.

That said, a CFA doesn't appear to be a score killer compared to some other things. Can see my max scores in my signature and that was with a CFA as the only blemish on EQ / EX... and actually I'm at an 827 EX FICO 8 and probably will be 780+ on EX FICO 2 as soon as my HELOC reports $0, so really the CFA is irrelevant to actually getting underwritten from a scoring perspective.

We don't really have much data in terms of how much they actually count unfortunately, if I'm still around in another ~3.5 years I'll try to capture a good before and after on all scores, but that's a long way and really it's irrelevant compared to the rest of the dirt on EQ/TU apparently looking at the EX scores.

It’s so infuriating... I am tempted to call the lender and see if they’ll remove the loan from reporting at all. That would mean I paid interest for nothing and would be a loss of 17 months of clean installment history though. In the long run, it’s probably less damaging to keep it on than to lose my only satisfactorily paid installment loan so I’ll just leave it. This just sucks though.

I wish I knew about MF before I got that loan, I would have just gone for one from NFCU.

Oh well, thanks for the reply. What a bummer. I guess I’ll just have to stay in the garden and let all of my inquiries age and my AoYA go up and baddies fall down and see where I end up.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Mon, 28 Jan 2019 15:00:44 GMT

@dynamicvb wrote:
Not to hijack, but I've been thinking about this lately. How can you tell if a particular company would be considered an CFA? I've been getting a lot of pre-approvals for companies such as Prosper, LendingClub, etc. and I've considered doing a personal loan for some home repairs. I've just been worried they would show up as a CFA and I don't want that as I want my scores to keep going up. Is there any way to tell if one would be coded like this?

Any personal loan that isn’t from a bank or credit union will likely be coded as a CFA. The same goes for 0 interest financing on cars, be careful you don’t get a CFA.

The reason code was buried because my TU had late payments but now that those are gone, the CFA moved up in scoring importance.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Mon, 28 Jan 2019 15:41:56 GMT

@Anonymous wrote:
It’s so infuriating... I am tempted to call the lender and see if they’ll remove the loan from reporting at all. That would mean I paid interest for nothing and would be a loss of 17 months of clean installment history though. In the long run, it’s probably less damaging to keep it on than to lose my only satisfactorily paid installment loan so I’ll just leave it. This just sucks though.

I wish I knew about MF before I got that loan, I would have just gone for one from NFCU.

Oh well, thanks for the reply. What a bummer. I guess I’ll just have to stay in the garden and let all of my inquiries age and my AoYA go up and baddies fall down and see where I end up.

Hi Saeren. Based on what you have written above, it sounds like:

(1) You have a closed CFA loan. And it was closed months before you saw the CFA reason statement.

(2) You have no open loans.

(3) You are a member of NFCU.

Can you confirm that all that is correct?

If so, I think you should:

(a) Implement the Share Secured Loan Technique with Navy. We now have many confirmations that the full technique works with Navy (including paying the loan to 8% and keeping it open for the full 60-month term). I believe a $3100 loan is large anough to secure the 60-month term.

(b) Go with your idea of trying to get the loan deleted by the original lender. There is not much evidence that FICO rewards people for closed loans with a long/perfect payment history. FICO should do that, but there is little evidence that it does. It is possible that your loan is helping your credit mix if you have no other loans of any kind, but you will get that benefit from the SSL plus other benefits (scoring help from having an installment utilization of 1-8%). If you try for deletion, it may take many attempts: try begging and crying a lot, claim that your mortgage score has been penalized which will keep you from getting your dream home, etc.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Mon, 28 Jan 2019 16:21:11 GMT

PS. You mention your mortgage score. Are you planning to buy a house in the next three years? If so, when is your best guess as to when that would be?

Re: I have the dreaded Consumer Finance reason code...

Pikaboo-icu — Mon, 28 Jan 2019 22:42:15 GMT

All I can say is: I am so very sorry!!!

You know my fight with this and I feel your pain and anger!

I'm still getting emails (last two Fridays) that they are "still working on my issue" with their specialty dept.

I really feel for you- and Relevate and ALL of us that have fallen to the CFA debacle.

I believe it's completely unfair to not inform consumers BEFORE they use that type of financing that will code this way.

I still have a FTC complaint, now that govt is open again, I will likely follow through, even if Affirm removes them.

People need to make informed credit decisions and they need to be informed when they're signing on the dotted line for a CFA product and that said product can/will be detrimental to their credit, even when paid as agreed.

So sorry!!

Re: I have the dreaded Consumer Finance reason code...

ridgebackpilot — Mon, 28 Jan 2019 23:09:12 GMT

@Anonymous wrote:
Any personal loan that isn’t from a bank or credit union will likely be coded as a CFA. The same goes for 0 interest financing on cars, be careful you don’t get a CFA.

Wow, I never thought of this! Not sure I understand the CFA code, but I did just get a 0% auto loan from Ford Motor Credit over the holidays. Is that likely to trigger the dreaded code?!

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 02:46:14 GMT

OP, while I understand your frustration here, to be honest I don't think the CFA is adversely impacting your scores much. Of course it's very difficult to quantify, but I look at it this way. Your negative reason statements are listed in order of strength (against your FICO score). Your collection one is at the top of the list because it's of course most impactful, impacting your scores 50 maybe even 100 points, who knows. Your CFA code is at the bottom of the list. What seems like a decent benchmark though here is your 3rd from the top regarding seeking credit. I'm not sure where this negative reason statement comes from, but it could be from the presence of an inquiry (for example). That being said, if the inquiry is impacting your score (say) 6 points, it would suggest the CFA is impacting your score 5 points or less since it's 1 notch lower in the list. Perhaps the others in this thread can point to what can generate that 3rd reason statement outside of an inquiry, but that's the first thing that comes to mind for me.

Re: I have the dreaded Consumer Finance reason code...

Remedios — Tue, 29 Jan 2019 02:49:16 GMT

He has a lot of new accounts

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 02:56:51 GMT

@Remedios wrote:
He has a lot of new accounts

I suppose that could be it. Seeking credit to me didn't sound like a statement for a lot of new accounts, but I'm not expert on those things. I would have thought the statement would point to something more like too many new accounts or something that was a bit more fitting.

Re: I have the dreaded Consumer Finance reason code...

Revelate — Tue, 29 Jan 2019 03:46:51 GMT

@Anonymous wrote:
@Remedios wrote:
He has a lot of new accounts
I suppose that could be it. Seeking credit to me didn't sound like a statement for a lot of new accounts, but I'm not expert on those things. I would have thought the statement would point to something more like too many new accounts or something that was a bit more fitting.

Seeking credit = inquiries.

Collection = dirty bucket, new accounts isn't even a reason code in them.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 04:10:39 GMT

@Anonymous wrote:
@Anonymous wrote:
It’s so infuriating... I am tempted to call the lender and see if they’ll remove the loan from reporting at all. That would mean I paid interest for nothing and would be a loss of 17 months of clean installment history though. In the long run, it’s probably less damaging to keep it on than to lose my only satisfactorily paid installment loan so I’ll just leave it. This just sucks though.

I wish I knew about MF before I got that loan, I would have just gone for one from NFCU.

Oh well, thanks for the reply. What a bummer. I guess I’ll just have to stay in the garden and let all of my inquiries age and my AoYA go up and baddies fall down and see where I end up.
Hi Saeren. Based on what you have written above, it sounds like:

(1) You have a closed CFA loan. And it was closed months before you saw the CFA reason statement. I paid it off with a BT this month.

(2) You have no open loans. Correct, no open installment loans

(3) You are a member of NFCU. Yep

Can you confirm that all that is correct?

If so, I think you should:

(a) Implement the Share Secured Loan Technique with Navy. We now have many confirmations that the full technique works with Navy (including paying the loan to 8% and keeping it open for the full 60-month term). I believe a $3100 loan is large anough to secure the 60-month term. I have to wait before I can do this. Right now I am not allowed to have countable assets over $2000 because I have Medicaid long term care benefits.

(b) Go with your idea of trying to get the loan deleted by the original lender. There is not much evidence that FICO rewards people for closed loans with a long/perfect payment history. FICO should do that, but there is little evidence that it does. It is possible that your loan is helping your credit mix if you have no other loans of any kind, but you will get that benefit from the SSL plus other benefits (scoring help from having an installment utilization of 1-8%). If you try for deletion, it may take many attempts: try begging and crying a lot, claim that your mortgage score has been penalized which will keep you from getting your dream home, etc. I think I will just leave this alone for now. I still have some baddies that have yet to fall from my reports and honestly, since I can’t add another installment loan right now and my applications almost always go to review due to low income, it looks better to have a satisfactorily paid installment loan on there. It would also hurt my AAoA. I’m currently over 3y but barely and I have two accounts hitting 10y and thus aging off this year so I’m going to end up around 2y6m, maybe less as it is.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 04:11:31 GMT

@Anonymous wrote:
PS. You mention your mortgage score. Are you planning to buy a house in the next three years? If so, when is your best guess as to when that would be?

I mentioned mortgage scores because of where that showed up. I have no plans to buy a house. I would be amazed if I could even get a loan with $18K fixed income.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 04:13:27 GMT

@Pikaboo-icu wrote:
All I can say is: I am so very sorry!!!

You know my fight with this and I feel your pain and anger!
I'm still getting emails (last two Fridays) that they are "still working on my issue" with their specialty dept.

I really feel for you- and Relevate and ALL of us that have fallen to the CFA debacle.
I believe it's completely unfair to not inform consumers BEFORE they use that type of financing that will code this way.
I still have a FTC complaint, now that govt is open again, I will likely follow through, even if Affirm removes them.

People need to make informed credit decisions and they need to be informed when they're signing on the dotted line for a CFA product and that said product can/will be detrimental to their credit, even when paid as agreed.

So sorry!!

It really is infuriating but I am starting to cool down... I had to avoid this thread earlier because I was seriously ticked off... but I am calming down now. The bottom line is that my credit is still much better than it was (that TU FICO was 647 in September) and I haven’t been turned down for the credit products that I have truly desired to have. If I was going to be buying a house, it would be an issue.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 04:14:16 GMT

@ridgebackpilot wrote:
@Anonymous wrote:
Any personal loan that isn’t from a bank or credit union will likely be coded as a CFA. The same goes for 0 interest financing on cars, be careful you don’t get a CFA.
Wow, I never thought of this! Not sure I understand the CFA code, but I did just get a 0% auto loan from Ford Motor Credit over the holidays. Is that likely to trigger the dreaded code?!

I am not aware if FMC turns up as a CFA these days but as Toyota does, it wouldn’t surprise me if Ford did.

Re: I have the dreaded Consumer Finance reason code...

Pikaboo-icu — Tue, 29 Jan 2019 04:20:31 GMT

@Anonymous wrote:
@Pikaboo-icu wrote:
All I can say is: I am so very sorry!!!

You know my fight with this and I feel your pain and anger!
I'm still getting emails (last two Fridays) that they are "still working on my issue" with their specialty dept.

I really feel for you- and Relevate and ALL of us that have fallen to the CFA debacle.
I believe it's completely unfair to not inform consumers BEFORE they use that type of financing that will code this way.
I still have a FTC complaint, now that govt is open again, I will likely follow through, even if Affirm removes them.

People need to make informed credit decisions and they need to be informed when they're signing on the dotted line for a CFA product and that said product can/will be detrimental to their credit, even when paid as agreed.

So sorry!!
It really is infuriating but I am starting to cool down... I had to avoid this thread earlier because I was seriously ticked off... but I am calming down now. The bottom line is that my credit is still much better than it was (that TU FICO was 647 in September) and I haven’t been turned down for the credit products that I have truly desired to have. If I was going to be buying a house, it would be an issue.

Here's a strange note that fits in with your theory that CFA's don't start becoming a problem until the score starts rising..

Your Mortgage Fico is over 700 and that's where the CFA notation shows up..

It sure seems to fit your theory..

I'm glad you calmed down over it..

It shouldn't hurt you too much as you had only one. It's just rotten they don't warn people..

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 04:21:14 GMT

@Anonymous wrote:
OP, while I understand your frustration here, to be honest I don't think the CFA is adversely impacting your scores much. Of course it's very difficult to quantify, but I look at it this way. Your negative reason statements are listed in order of strength (against your FICO score). Your collection one is at the top of the list because it's of course most impactful, impacting your scores 50 maybe even 100 points, who knows. Your CFA code is at the bottom of the list. What seems like a decent benchmark though here is your 3rd from the top regarding seeking credit. I'm not sure where this negative reason statement comes from, but it could be from the presence of an inquiry (for example). That being said, if the inquiry is impacting your score (say) 6 points, it would suggest the CFA is impacting your score 5 points or less since it's 1 notch lower in the list. Perhaps the others in this thread can point to what can generate that 3rd reason statement outside of an inquiry, but that's the first thing that comes to mind for me.

While this is true about the priority, my auto scores have it as number two. That public record will be gone when my Ch7 falls August of next year and then that CFA will be the most damaging thing on my auto score.

I don’t doubt that CFAs aren’t as impactful as other items as far as your score is concerned but in a manual review? That makes me curious.

It also really infuriates me that I am getting docked as if it was a peer to peer loan. These Best Egg loans are funded by Cross River Bank and I find it hard to believe that they are rated as highly as they are (even on Credit Karma where EVERY product gets slaughtered they have a 5* average) if they’re destroying people’s credit — when my repo and student loan lates fall off EQ and EX in July I’m going to see if the CFA code pops on them. If it doesn’t, I’m going to have to dispute the accuracy of the labeling with TU.

Re: I have the dreaded Consumer Finance reason code...

Anonymous — Tue, 29 Jan 2019 04:22:21 GMT

@Anonymous wrote:
@Remedios wrote:
He has a lot of new accounts
I suppose that could be it. Seeking credit to me didn't sound like a statement for a lot of new accounts, but I'm not expert on those things. I would have thought the statement would point to something more like too many new accounts or something that was a bit more fitting.

Seeking credit is specially related to inquiries. I have 5 inquiries on TU at the moment.