topic Re: Do Consumer Finance Accounts ever drop off your credit report in General Credit Topics

Do Consumer Finance Accounts ever drop off your credit report

Anonymous — Sat, 29 Jan 2011 03:28:54 GMT

After a few years of working on trying to improve me credit, I recently pulled my two reports. Under 'Understanding Your Score' in my TransUnion report, it says that I have two CFAs that are hurting my score. Yes they are there. I had to get the loans to help get me out of this mess. They are paid in full and closed - have been for several years. I thought bad marks would eventually drop off if you kept your nose clean. Am I cursed to have these two accounts on my credit even though they were paid timely? It says some lender will look negatively on having these accounts on your credit report. Will they ever drop off? After seven years, can I ask for them to be removed, or are all lenders always going to know I had problems in the past and judge me for that past? My TransUnion score is now 722, by the way, but if lenders don't like to see them, I don't want them there.

Re: Do Consumer Finance Accounts ever drop off your credit report

RobertEG — Sat, 29 Jan 2011 03:47:58 GMT

The relevant provision is FCRA 605(a)(5), which requires that any adverse item of information not specifically mentioned in FCRA 605(a)(1)-(4) most drop from your CR after 7 years from the date of the derog information.

You dont go back to the creditor for CR deletion matters to to aging of a derog.. Responsibility for CR deletion resides solely with the CRA. If it appears in your CR after 7 years from the date of reported delinquency, you contact the CRA for their violation of FCRA 605(a).

Re: Do Consumer Finance Accounts ever drop off your credit report

Anonymous — Sat, 29 Jan 2011 03:56:22 GMT

It looks to me, then, that getting this off of my CRs in the next couple of years should be fairly simple. There's no derogatory remarks on them, only that they exist, So, would they be eligible to be removed 7 years from when I opened them or 7 years after they are paid off and closed?

Re: Do Consumer Finance Accounts ever drop off your credit report

MarineVietVet — Sat, 29 Jan 2011 03:56:51 GMT

@Anonymous wrote:
After a few years of working on trying to improve me credit, I recently pulled my two reports. Under 'Understanding Your Score' in my TransUnion report, it says that I have two CFAs that are hurting my score. Yes they are there. I had to get the loans to help get me out of this mess. They are paid in full and closed - have been for several years. I thought bad marks would eventually drop off if you kept your nose clean. Am I cursed to have these two accounts on my credit even though they were paid timely? It says some lender will look negatively on having these accounts on your credit report. Will they ever drop off? After seven years, can I ask for them to be removed, or are all lenders always going to know I had problems in the past and judge me for that past? My TransUnion score is now 722, by the way, but if lenders don't like to see them, I don't want them there.

Were they closed in good standing? In other words you never had any lates ot other negatives associated with these accounts?

Generally closed accounts will stay for up to 10 years after closing. In some cases they drop off early and in rare instances closed accounts will stay on past the normal 10 year limit.

Is a CFA notation a bad thing? I've read different opinions on that so I'm not going to say one way or another because I don't really know enough about them.

As far as what TU had to say about it my TU report always says my non-mortgage loan balances are too high but I pay it no attention. Does your TU report say these "might be hurting your score" or does it state they are definitely hurting?

From a BK years ago to:
EX - 9/09 pulled by lender 802, EQ - 10/10-813, TU - 10/10-774

"Some people spend an entire lifetime wondering if they've made a difference. The Marines don't have that problem".

Re: Do Consumer Finance Accounts ever drop off your credit report

Anonymous — Sat, 29 Jan 2011 04:05:12 GMT

Marinevelvet, this is what it says.....

You have a consumer finance account on your credit report.

Number of consumer finance accounts on your credit report
2 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.

What to do about this: You should try to stay current with all of your payments and avoid opening any new credit accounts that you don't need.

Re: Do Consumer Finance Accounts ever drop off your credit report

RobertEG — Sat, 29 Jan 2011 04:10:46 GMT

They drop after 7 years from the date the delinquency occured. Account opening and closing dates are irrelevant to calculation of CR deletion date.

The CRA is charged with monitoring deletion dates. It should be automatic, if they do their job.

No, the accounts dont drop, but any derog information thereunder must be excluded from any CR they provide after 7 years from the date of the derog.

Re: Do Consumer Finance Accounts ever drop off your credit report

MarineVietVet — Sat, 29 Jan 2011 04:13:29 GMT

@RobertEG wrote:
They drop after 7 years from the date the delinquency occured. Account opening and closing dates are irrelevant to calculation of CR deletion date.
The CRA is charged with monitoring deletion dates. It should be automatic, if they do their job.

No, the accounts dont drop, but any derog information thereunder must be excluded from any CR they provide after 7 years from the date of the derog.

Robert the OP said: There's no derogatory remarks on them, only that they exist,

She just wants the CFA accounts gone. It has nothing to do with derogatories.

Re: Do Consumer Finance Accounts ever drop off your credit report

MarineVietVet — Sat, 29 Jan 2011 04:21:15 GMT

@Anonymous wrote:
Marinevelvet, this is what it says.....

You have a consumer finance account on your credit report.
Number of consumer finance accounts on your credit report
2 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.
What to do about this: You should try to stay current with all of your payments and avoid opening any new credit accounts that you don't need.

As I said you'll get different opinions about CFA's. Here is one thread talking about this: http://ficoforums.myfico.com/t5/Understanding-FICO-Scoring/quot-Consumer-Finance-Account-quot/m-p/433457/highlight/true#M33134. In it one of our long time members and who is very respected thinks that the damage from a CFA is minor.

Here are some more threads talking about CFA's if you want to read other views on this: http://ficoforums.myfico.com/t5/forums/searchpage/tab/message?q=consumer+finance+accounts.

Re: Do Consumer Finance Accounts ever drop off your credit report

RobertEG — Sat, 29 Jan 2011 04:27:32 GMT

Posting of derogs and the posting of supplemental remarks are totally different. . OP posted about exising derogs still in the CR,. not remarks.

Dates of derogs appear to have everything to do with it.

Re: Do Consumer Finance Accounts ever drop off your credit report

Anonymous — Sat, 29 Jan 2011 04:44:42 GMT

Yes, I do have a few derogs on my report, but not on these two Household Finance accounts. They have been closed for several years, but not yet 10. I don't see anything bad on these accounts except that they exist.

Re: Do Consumer Finance Accounts ever drop off your credit report

Anonymous — Sat, 29 Jan 2011 16:23:02 GMT

@Anonymous wrote:
Marinevelvet, this is what it says.....

You have a consumer finance account on your credit report.
Number of consumer finance accounts on your credit report
2 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.
What to do about this: You should try to stay current with all of your payments and avoid opening any new credit accounts that you don't need.

Hi OneDay,

The interesting thing to me is that 12% of FICO High Achievers Do have a CFA on their reports (and, of course, they STILL are High Achievers - i.e. they have a FICO of 760 or better - even with the CFA's reporting). DH had an EQ FICO of 804 with a CFA closed but still reporting.

Don't get me wrong - I'm not a fan of CFA's and am paying attention to what I app for because I prefer not to have any additional CFA's on my report. That being said, even with a CFA doing whatever FICO damage it does, it doesn't keep you out of the High Achievers club. And at this point, it may be helping your AAofA, and thus your score, more than it is hurting. I have had CFA's causing more damage than a handful of new accounts according to myFICO reports - so I don't discount that they can cause a significant enough ding to pay attention to them.

It's good to note that once they're closed, they cause less FICO damage as time goes along than they did when they were open.

As MVV states, this account will continue to report for approximately ten years after closing.

__________________

ETA: In response to your comment:

are all lenders always going to know I had problems in the past and judge me for that past?

I doubt that any lenders will red flag you for having a CFA - it causes something of a FICO ding (again depending on whether it's still open and how long ago it was closed). We refinanced our mortgage last year, and the computer and the manual review had no issues with the CFA - and in fact, they're actually fairly common. Ours was from Citifinancial - which is an arm of Citi Bank. I still try to avoid them but they're not worth losing sleep over (I know - I lost a little sleep on the way to understanding CFA's a little better).

Re: Do Consumer Finance Accounts ever drop off your credit report

Anonymous — Wed, 02 Feb 2011 00:56:26 GMT

I had one CFA account on my report, from Wentworth Gallery. I had closed it over ten years ago (in good standing), and I kept waiting for it drop off my report, but it never did. Turns out they were still reporting my account each month! I finally wrote Wentworth and asked them why they were still reporting on a closed account over ten years ago... and it's gone from my reports now.