topic Re: Affirm curiosities in General Credit Topics

Affirm curiosities

Tiersha — Mon, 27 Mar 2023 12:06:56 GMT

I've read a little here about the Affirm Financing. Ive read where most get a 10 pt ding for using them because they are a Cfa...that's what I am understanding anyway.

What makes them a cfa?

I've seen people mention installment loans being a cfa i.e. car loans.

My car loan didn't ding me- just random fyi.

I'm asking because I want to finance a cnc purchase but the company uses Affirm and I was hesitant as I thought they were configured for sub prime users and even those with decent scores got stuck with the sub prime configuration.

Why are cfa loans dingy when there are so many considered as cfa loans?

Am I just misunderstanding this whole cfa thing?

Haha All I went searching for initially was what scoring model Affirm uses and here I am in a squirrel hole lol.

Re: Affirm curiosities

GZG — Mon, 27 Mar 2023 12:41:36 GMT

@Tiersha wrote:
I've read a little here about the Affirm Financing. Ive read where most get a 10 pt ding for using them because they are a Cfa...that's what I am understanding anyway.
What makes them a cfa? 'because they're coded as such'
the 'FICO' reasoning is that these are 'bad' loans that people without access to traditional financing get because they can't get good credit options. Which is fair. If people with 'CFA's' are riskier customers, I'd understand it from FICO's end.
I've seen people mention installment loans being a cfa i.e. car loans.
which is why CFA penalty is dumb, the logic behind CFA's just isn't true anymore when 0% affirm APR and normal dealer financing can arbitrarily be labeled CFA.
My car loan didn't ding me- just random fyi.

I'm asking because I want to finance a cnc purchase but the company uses Affirm and I was hesitant as I thought they were configured for sub prime users and even those with decent scores got stuck with the sub prime configuration.
Usually this is true, Affirm does offer 30% APR subprime bad financing. They also offer 0% APR stuff too, it's simply not worth them reporting a 0% APR loan and eating a CFA peanlty.
Why are cfa loans dingy when there are so many considered as cfa loans?
It's fine to label bad loans as bad loans and be given a penalty for them, but for Affirm to offer prime 0 APR terms while hiding reporting as a CFA is garbage. If I had dealer financing label a car loan with them as a CFA, I'd be upset. Wonder if I even ask dealer financing if they know if their loan is labeled as a CFA or not if they would even know.
Am I just misunderstanding this whole cfa thing?
No, it's just an unfortunate aspect of FICO
Haha All I went searching for initially was what scoring model Affirm uses and here I am in a squirrel hole lol.

Re: Affirm curiosities

JoeRockhead — Mon, 27 Mar 2023 12:47:51 GMT

Consumer finance accounts are generally not looked upon as favorable because they're most often geared towards people with lower, or even poor credit and the biggest negative factor is they often have less than favorable terms. They carry much higher interest than other loans from prime lenders and because of this they tend to have a high default rate. While Affirm does have some 0% terms they can charge up to 30% interest. Additionally, their fees to the vendor (company you're buying from) are on the verge of being absurd so there's a good chance they're charging more for the product to help cover their fees.

Re: Affirm curiosities

Tiersha — Mon, 27 Mar 2023 12:50:54 GMT

Great answer and tx!

So either way a stupid catch 22 of sorts. Take out a new card that's not cfa and pay 17-24% no cfa ding or take out Affirm, with a ding with a 0% option (would require weekly pay I believe I read) ...well that's just crappy all the way around lol.

That being said I do find it interesting that

@GZG wrote:
@Tiersha wrote:
I've read a little here about the Affirm Financing. Ive read where most get a 10 pt ding for using them because they are a Cfa...that's what I am understanding anyway.
What makes them a cfa? 'because they're coded as such'
the 'FICO' reasoning is that these are 'bad' loans that people without access to traditional financing get because they can't get good credit options. Which is fair. If people with 'CFA's' are riskier customers, I'd understand it from FICO's end.
I've seen people mention installment loans being a cfa i.e. car loans.
which is why CFA penalty is dumb, the logic behind CFA's just isn't true anymore when 0% affirm APR and normal dealer financing can arbitrarily be labeled CFA.
My car loan didn't ding me- just random fyi.

I'm asking because I want to finance a cnc purchase but the company uses Affirm and I was hesitant as I thought they were configured for sub prime users and even those with decent scores got stuck with the sub prime configuration.
Usually this is true, Affirm does offer 30% APR subprime bad financing. They also offer 0% APR stuff too, it's simply not worth them reporting a 0% APR loan and eating a CFA peanlty.
Why are cfa loans dingy when there are so many considered as cfa loans?
It's fine to label bad loans as bad loans and be given a penalty for them, but for Affirm to offer prime 0 APR terms while hiding reporting as a CFA is garbage. If I had dealer financing label a car loan with them as a CFA, I'd be upset. Wonder if I even ask dealer financing if they know if their loan is labeled as a CFA or not if they would even know.
Am I just misunderstanding this whole cfa thing?
No, it's just an unfortunate aspect of FICO
Haha All I went searching for initially was what scoring model Affirm uses and here I am in a squirrel hole lol.

Affirm advertises $139-$339 for same price (based on cs I'm sure) yet I know from exp that a 24% card with the same amt is less than $100 for me...leading me to believe that Affirm would put me straight to high risk configuration.

Re: Affirm curiosities

Tiersha — Mon, 27 Mar 2023 12:53:29 GMT

Well hell I guess I will bypass Affirm, seek a new card and pay for it that way. Cr4dit is already a game enough and I don't like being dinged at 30% when my scores are better than that. Gee put me back to surprise at 520 when I financed my 1st car years ago ...stupid.

Re: Affirm curiosities

donkort — Mon, 27 Mar 2023 13:37:45 GMT

"Consumer finance" goes back to the days of Household Finance, Beneficial Finance, etc---when most people couldn't get loans from banks. These "consumer finance" companies were the only way many could get an unsecured loan. Otherwise, a person had to sell something to a pawn shop, or go to a loan shark.

This was, primarily, before FICO scores started in the late 80s.

Re: Affirm curiosities

Tiersha — Mon, 27 Mar 2023 14:33:29 GMT

Well one would think they should have options for those with good credit as well smh...so much for progressing.

Re: Affirm curiosities

Brian_Earl_Spilner — Mon, 27 Mar 2023 16:03:07 GMT

Well, I'm totally ok with getting hit with a cfa penalty as long as I can finance my phone, tv, mattress, etc. forr 0%. Not like you can't have good credit with a cfa reporting. Finances before fico.

Re: Affirm curiosities

jsweeti1 — Mon, 27 Mar 2023 20:54:40 GMT

@Tiersha Of note, is that Affirm will likely report missed payments more so than if payments are made on-time. So make sure that you do not miss a payment. From what I am told, creditors are allowed to pick and choose what they report.

Re: Affirm curiosities

markbeiser — Tue, 28 Mar 2023 06:03:24 GMT

@Tiersha wrote:

I've seen people mention installment loans being a cfa i.e. car loans.
which is why CFA penalty is dumb, the logic behind CFA's just isn't true anymore when 0% affirm APR and normal dealer financing can arbitrarily be labeled CFA.

Yeah, the 0% financing I got on a new truck through Ford Motor Credit in 2013 is coded as a CFA...🙄

Re: Affirm curiosities

Libra85 — Tue, 28 Mar 2023 10:43:20 GMT

I've had a affirm account since 2020. The first 3 purchases reported to CB. I've purchased several other items for 0% financing and varying APR and none of those items have reported. My line of credit is now $6k. For me it's like a hidden trade line. Affirm SP EX every time you login.

Re: Affirm curiosities

md_rebuild — Wed, 29 Mar 2023 15:43:32 GMT

@Libra85 wrote:
I've had a affirm account since 2020. The first 3 purchases reported to CB. I've purchased several other items for 0% financing and varying APR and none of those items have reported. My line of credit is now $6k. For me it's like a hidden trade line. Affirm SP EX every time you login.

Same for me. I mainly use it for baseball tickets. I typically go to quite a few games and like sitting in good seats. That's what I mainly use it for, and I get 0% financing and not a single one has reported to a CB. I'd probably change to putting them on a CC if they did report.

Re: Affirm curiosities

Tiersha — Wed, 29 Mar 2023 15:47:59 GMT

Havent missed a payment in years so I should be good there!

Re: Affirm curiosities

Tiersha — Wed, 29 Mar 2023 15:50:10 GMT

To me that is stupid. Well with it being 2024 that should come off.

It's a catch 22...don't want the cfa tag but also may be a hidden line which could be good but at the cost of higher interest rates or def up your utilization or get yet another card etc.

Re: Affirm curiosities

911gt34life — Fri, 31 Mar 2023 21:03:38 GMT

i have affirm show up as Personal loans kind help my score...

Re: Affirm curiosities

GZG — Fri, 31 Mar 2023 21:14:45 GMT

@Libra85 wrote:
I've had a affirm account since 2020. The first 3 purchases reported to CB. I've purchased several other items for 0% financing and varying APR and none of those items have reported. My line of credit is now $6k. For me it's like a hidden trade line. Affirm SP EX every time you login.

I would 100% be their customer if I could have a hidden TL like that, I wish they only reported if you were late, I also wish they were more up front about their reporting practices

Re: Affirm curiosities

Brian_Earl_Spilner — Fri, 31 Mar 2023 21:33:28 GMT

It's not a hidden trade line. They choose not to report to all the bureaus, which any lender can do. There may also be certain situations that they wouldn't report, like if it's only 4 pmnts over 2 months. Affirm shows as loans on EX for me.

Re: Affirm curiosities

Lou-natic — Fri, 07 Apr 2023 18:59:55 GMT

I took an Affirm loan for a laptop years ago and they only reported to Experian and Experian is the only one that gives me a ding for a CFA. I know I'll never use Affirm again. If knew then what I know now I wouldn't have used them at all.

Re: Affirm curiosities

Tiersha — Fri, 07 Apr 2023 19:05:03 GMT

Because of the ding I won't use them. I have a cnc to purchase and the company uses Affirm. Instead I'll transfer balances to a zero% card and use my normal cc. Unfortunately I don't have business credit built up to get a business card so it has to go on the personal side.

Re: Affirm curiosities

butterpecan — Mon, 13 May 2024 07:29:50 GMT

@Brian_Earl_Spilner wrote:
It's not a hidden trade line. They choose not to report to all the bureaus, which any lender can do. There may also be certain situations that they wouldn't report, like if it's only 4 pmnts over 2 months. Affirm shows as loans on EX for me.

@Brian_Earl_Spilner Saw this thread....Wondering if the PayPal "pay monthly" loan through WebBank on PayPal's website is also a CFA?