cancel
Showing results for 
Search instead for 
Did you mean: 

Consumer Finance Account - Question...

Highlighted
New Visitor

Consumer Finance Account - Question...

Credit simulation indicates a Consumer Finance Account (assume a Kohls card or Home Depot Card).  Have an American Express and a Best Buy Visa card.  Should I close the Kohls card and or Home Depot card (opened originally to take advantage of a % savings) and if I do is that a bad thing?

Message 1 of 24
23 REPLIES 23
Highlighted
Senior Contributor

Re: Consumer Finance Account - Question...

Consumer Finance Account usually refers to a personal loan, like Prosper or Lending Tree, do you have one of those?
A store card like Kohls is still considered a revolving account.

Message 2 of 24
Highlighted
Super Contributor

Re: Consumer Finance Account - Question...


@elcid86 wrote:

Credit simulation indicates a Consumer Finance Account (assume a Kohls card or Home Depot Card).  Have an American Express and a Best Buy Visa card.  Should I close the Kohls card and or Home Depot card (opened originally to take advantage of a % savings) and if I do is that a bad thing?


You should go over your report to find out what's showing up as a consumer finance account.


Total revolving limits 653000 (575000 reporting)

Message 3 of 24
Highlighted
New Visitor

Re: Consumer Finance Account - Question...

Thanks DaveInAZ!

 

Yes, I had an Affirm account (paid off) and Klarna (paid off) so you're right, that's probably those.  They were small purchases that I thought would "mix" my credit...assume I hurt myself with those...please confirm and I won't do that anymore...

Message 4 of 24
Highlighted
Super Contributor

Re: Consumer Finance Account - Question...

You were doing what FICO tells you to do, which is to have a broad range of different credit types.  CFAs are most definitely a particular type of credit.  FICO does a terrible job in this one area, which is to communicate the fact that CFAs actually harm your score. 

 

Good plan to never open one again.  You might want to take it a step further.  I.e. call the CFA lender, tell them you are trying to buy a house and that the presence of the CFA is actually damaging your score and your whole future as a homeowner.  Cry a lot while you talk to them.  Tell them you'd be so grateful if a supervisor could approve the deletion of the account from your reports.

 

You may get somebody sympathetic and they might delete the account.  Since you have two CFAs you probably need both of them to be deleted to get any help.

Message 5 of 24
Highlighted
Senior Contributor

Re: Consumer Finance Account - Question...

Yes
I have a Wal-Mart and Lowe's store card and don't get that consumer finance message, but a couple years ago when I had a Prosper loan I did. The CRAs don't like them, especially Transunion.

Message 6 of 24
Highlighted
Legendary Contributor

Re: Consumer Finance Account - Question...

Dave is correct.

An account has an Portfolio Type code (base segment, field code 8 ), and then an AccountType (base segment, code 9 ) under each Portfolio Type.

 

A Consumer Finance Account code/designation is provided in the Credit Reporting Resource Guide only for Portfolio Types that are installment loans.   See Exhibit 1 of the Credit Reporting Resource Guide for permissible Account Type field codes for each Portfolio Type. 

There is no Account Type of consumer finance account under a Portfolio Type of revolving credit.

Message 7 of 24
Highlighted
New Contributor

Re: Consumer Finance Account - Question...

If those are credit account, keep it open. It will help with age of credit. Age of credit have some part of role to involve your credit. The oldest open account you have. Lender will consider you as a dependable borrower. Even if you don’t use them. Keep them open and active. 👍
Date 07/01/2018




Message 8 of 24
Highlighted
Senior Contributor

Re: Consumer Finance Account - Question...


@JohnnyGaddar wrote:
If those are credit account, keep it open. It will help with age of credit. Age of credit have some part of role to involve your credit. The oldest open account you have. Lender will consider you as a dependable borrower. Even if you don’t use them. Keep them open and active. 👍

Accounts in good standing closed by the consumer stay on your credit report for at least 10 years, and count toward your average age of accounts for Fico scoring. My oldest account is a Synchrony store card for an electronics store, opened in 2004 (my first HDTV, which cost over $2k back then Smiley Sad). For some reason Sync still reports it and it shows up on my credit report as 14 years xx months old. 

 

When I had a Prosper loan in my TU Fico score under negative items adversely affecting my score it would say "too many consumer finance accounts", even though I just had the one Prosper loan. As soon as I paid it off it that "consumer finance" item disappeared, but the closed paid satisfactorily account still reports under closed accounts, along with the Sync electronics store account.


Message 9 of 24
Highlighted
Valued Contributor

Re: Consumer Finance Account - Question...

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!
Message 10 of 24
Advertiser Disclosure: The offers that appear on this site are from third party advertisers from whom FICO receives compensation.