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Consumer Credit

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Anonymous
Not applicable

Re: Consumer Credit

If I killed discount tire my total utilization would go up 1%. If I killed that are my carcare card it would go up a total of 1.6% so I guess the question is if i did close them would the ding on my score go away or take 10 yeras? My AAofA would barely be hit since by the time it hits 10 years i will have an average age of 137 months. 

 

I mean really, Barclay just raised my limit to tripe what it was and I could just use that for those types of expenses. I still will keep my amazon and newegg though because i do buy frequently and get nice discounts but I really dont need the other two. How often does one buy tires and my limit on the carcare card is way lower than anything else I have as a major card. 

Message 11 of 25
Anonymous
Not applicable

Re: Consumer Credit

A CFA is typically a single installment account, created specifically to finance the purchase of a single thing.  E.g. that big sofa and loveseat at Rooms To Go, that Washer/Dryer at Lowe's, that big screen TV and sound system at Best Buy, that fancy laptop at Dell.  When the item is paid off, the account is closed.

 

The accounts you are mentioning sound more like store cards to me, where you can buy several different things, always with one monthly bill (like a credit card), and paying the account to zero doesn't close it. 

 

These kinds of store cards are usually not considered CFAs by FICO.  But it's conceivable that one or more of them might be.  That's one of the two frustrating things about CFAs:

 

(1)  There's little transparency from FICO about the general fact that CFAs are bad.  You have to be a weird credit geek to know this.

 

(2)  There's little transparency about whether a particular account  in this "gray area" (e.g. this card or that offer) will or will not be flagged as a CFA.  Even after it is on your report, the report itself may not say.

 

Even if the accounts you mention are not being flagged as CFAs (but are rather considered revolving accounts like store cards) be aware that store cards are considered a bad thing in other credit scoring models.  So it's probably good advice for any person to plan for sharply reducing the number of store cards he has and resolving to simply never agree to open any account of the sort I described above. 

 

PS.  A 0% major credit card (VISA, Mastercard, etc.) is not a CFA.

Message 12 of 25
Anonymous
Not applicable

Re: Consumer Credit

Yea they are all revolving trade lines like store cards.. i was misunderstanding and i would always stay away from those cfa loan kind of accounts anyway. Still as I think about it, it doesnt make sense to keep discount open at least especially if too many store cards could potentially be bad. I get nothing out of it.

Message 13 of 25
Anonymous
Not applicable

Re: Consumer Credit

TS, it sounds like you don't have any CFA accounts, just revolvers.  Even if you DID have a CFA account, closing it early [as opposed to taking it to term] may not necessarily be beneficial, as the closed account would stay on your CR for 10 years and many have still seen the negative reason code referencing the presence of a CFA after it has been closed, indicating that closing it may not necessarily help (score) compared to having it open.

Message 14 of 25
Anonymous
Not applicable

Re: Consumer Credit

I don't think so either thankfully. Ironically they raised my carcare limit so closing the discount tire won't affect my totally utilization at all haha
Message 15 of 25
Anonymous
Not applicable

Re: Consumer Credit


@Anonymous wrote:
I don't think so either thankfully. Ironically they raised my carcare limit so closing the discount tire won't affect my totally utilization at all haha

Just be aware that the credit scoring models used by the insurance industry penalize you for having auto-related credit accounts and also store cards.  These are not FICO models but they do exist and can affect a person's insurance premiums.

 

That's why personally I think it makes sense (for most people) to incorporate into their long-term credit plans the elimination of auto accounts and store cards.  It's not something to panic about of course.  Just more of a long term thing. 

 

Good reasons not to close a card:

      * It gives me strong benefits (that I really like) that I can't get even close to with another card

      * Closing it would bring my total number of cards to 5 or less.

      * It is my oldest card and it is much older than any other card.

 

Good reasons to close a card:

      * I have no use for it and it is "bad" in some other way (tiny CL, store card, auto account, etc.).

      * There is a monthly or annual fee for using it (and I don't get that much benefit from it).

Message 16 of 25
Anonymous
Not applicable

Re: Consumer Credit

Wow seriously? Well that kinda sucks. I will defintely close my discount card.

Message 17 of 25
Anonymous
Not applicable

Re: Consumer Credit

i wouldn't close any card that I wanted or use, consumer finance or not. I think the effect of a consumer finance account on one's report is minimal and closing the account won't help as it will remain on your credit report for 10 years.

Message 18 of 25
Anonymous
Not applicable

Re: Consumer Credit

So I ended up closing the discount tire because really its only main benefit is I can maybe get 50-70USD off a set of tires, depending on the promo running then and if it happens to be tires I want. Over the course of a tires lifetime that really is a small amount to worry about. The credit one card which was the one I pay 10 a month for, I kept open for now because they were willing to drop the monthly fee entirely so I figured it would be good, since its a visa, to keep. I will use it to buy myself a 50USD amazon gift card a month. 

Message 19 of 25
Anonymous
Not applicable

Re: Consumer Credit


@Anonymous wrote:

@Anonymous wrote:
I don't think so either thankfully. Ironically they raised my carcare limit so closing the discount tire won't affect my totally utilization at all haha

Just be aware that the credit scoring models used by the insurance industry penalize you for having auto-related credit accounts and also store cards.  These are not FICO models but they do exist and can affect a person's insurance premiums.

 

That's why personally I think it makes sense (for most people) to incorporate into their long-term credit plans the elimination of auto accounts and store cards.  It's not something to panic about of course.  Just more of a long term thing. 

 

Good reasons not to close a card:

      * It gives me strong benefits (that I really like) that I can't get even close to with another card

      * Closing it would bring my total number of cards to 5 or less.

      * It is my oldest card and it is much older than any other card.

 

Good reasons to close a card:

      * I have no use for it and it is "bad" in some other way (tiny CL, store card, auto account, etc.).

      * There is a monthly or annual fee for using it (and I don't get that much benefit from it).


Please clarify a couple of things for me.  Are you specifically referring to automotive store credit cards or ALL store cards?  If the latter, does that include Visa/MC/AmEx (etc.) co-branded cards too?  Last, it seems you are saying regardless of any of these questions, FICO isn't negatively impacted in any way from store cards of any kind, unless of course they are in a negative status...am I correct on that?  Thanks again.

Message 20 of 25
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