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Affirm curiosities

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Tiersha
Regular Contributor

Affirm curiosities

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.

 

 

 

Message 1 of 19
18 REPLIES 18
GatoradeZeroGuy
Valued Contributor

Re: Affirm curiosities


@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.

 


 

Starting FICO 8:

Current FICO 8:

1/6, 5/12, 12/24




Message 2 of 19
JoeRockhead
Senior Contributor

Re: Affirm curiosities

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.

Message 3 of 19
Tiersha
Regular Contributor

Re: Affirm curiosities

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


@GatoradeZeroGuy 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.

Message 4 of 19
Tiersha
Regular Contributor

Re: Affirm curiosities

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.

Message 5 of 19
donkort
Valued Contributor

Re: Affirm curiosities

"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.   

FICO 8: EQ 810; TU 816; EX 822 as of 7/5/2022
Message 6 of 19
Tiersha
Regular Contributor

Re: Affirm curiosities

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

Message 7 of 19
Brian_Earl_Spilner
Credit Mentor

Re: Affirm curiosities

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. 

    
Message 8 of 19
jsweeti1
Valued Member

Re: Affirm curiosities

@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. 

FICO8 Scores as of October 2023:

Credit Cards:




Utilization: 1-4%; Inquiries: 15

*Tip: if you hover over the credit cards, you can see the credit limit for each
Message 9 of 19
markbeiser
Established Contributor

Re: Affirm curiosities


@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...🙄

Back to gardening until Late February 2025.

Current FICO8:
Message 10 of 19
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