Consumer Finance Account - Question...

[sarge12]

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@JVille wrote:
ZERO interest is better which is the only reason why we did it.

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The 0% interest might be worth it if you know for a fact that the existence of a CFA account on your mortgage scores will not drag your score too low to qualify for the lowest rates for a future mortgage loan. That potential issue should be considered since mortgages often run 30 years. If you are older and know for sure you will never even apply for another mortgage, it may be worth the score hit. If that 5 or 6 year savings costs you higher interest for 30 years on a future mortgage however, it might be penny wise and pound foolish. I personally consider it wrong that they do not let the consumer know that it will show on the credit reports as a CFA and actually harm the score even if paid perfectly. I had no idea when I signed on the dotted line for financing with American Honda Financial that would be the case. If I had known, I would never have signed, and resent the fact I was not informed.

[Revelate]

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@sarge12 wrote:

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@Revelate wrote:

Wow thanks all; yeah, apparently dealer financing isn't worth it at all unless the interest rate is non-trivially superior (patently unlikely in the extreme in the current market and current CU secured financing rates).

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I actually financed a vehicle for my Neice, who makes the payments, for 1.75% interest rate at a credit union. That is pretty low interest.

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Yeah, even with my recent credit snafu and the interest rate increases I'm still expecting to be able to get around 3% or perhaps lower if I go with a typical term... and that's cheaper than my mortgage (3.25%) now that I think about it.

Was thinking doing a max term and then just paying over the minimum to accelerate the amortization curve, but I may rethink that approach.

[Anonymous]

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@JVille wrote:
Just an FYI our Car Loan is with GM (that’s General Motors folks) we took that loan for our new Escalade 5 yrs ZERO Interest. What’s not to love right? Wrong the bad news is it’s considered a Finance Company yep sure bet they finance Cars!
My hubbies 850 Mtg Scores went into the 790’s and mine into the 740’s we are being dinged for Consumer Finance Account and Utilization on that acct. Other than our Mtg Ln and this car loan we pay everything off each month except leave a $50 balance on one card. Oldest account 45 Years, average age of accts 12 yrs.

This GM Loan being treated as a Finance Co rather than a car loan just really pisses me off!

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Wonder? My loan with Ford show as an installment loan. What's the deal?

[JVille]

Wish I know I’m showing as a Finance Company! Pisses me off too