@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.
0/6, 3/12, 10/24
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.
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.
@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.
Utilization: 1-4%; Inquiries: 15
@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...🙄
