Consumer Finance Account

[Cjethompson2017]

What on earth does that mean?? And why would it have a negative impact on my credit?? Seems a bit odd to me.

[SouthJamaica]

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@Cjethompson2017 wrote:

What on earth does that mean?? And why would it have a negative impact on my credit?? Seems a bit odd to me.

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The term is sometimes applied by the older FICO scoring models to store installment purchases, some auto loans, and to some online loans.

It is not clear that the designation has a negative impact on your credit. It appears that it might with some of the older scoring models.

There is no good reason why it should have negative connotations.

[Anonymous]

We have all seen them.  A good example is a mattress store that has signs plastered all over "No credit needed".  There is a good chance it will be a CFA.  Generally speaking, people who take these kinds of loans are considered higher risk because of things like no credit, bad credit, inability to pay in full, etc.  Therefore, the mere presence of a CFA on your reports would not be a favorable one.

I do agree though that it shouldn't matter.  Whether it is a loan from a credit union, payday loan, or a CFA, the bottom line is the payment history on that account.  But Fico no like-o. 

[Cjethompson2017]

I just find that to be absolutely ridiculous and should have no meaning to your fico. The ones I had are all paid off. How annoying. 😂

[AzCreditGuy]

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@Anonymous wrote:

We have all seen them.  A good example is a mattress store that has signs plastered all over "No credit needed".  There is a good chance it will be a CFA.  Generally speaking, people who take these kinds of loans are considered higher risk because of things like no credit, bad credit, inability to pay in full, etc.  Therefore, the mere presence of a CFA on your reports would not be a favorable one.

I do agree though that it shouldn't matter.  Whether it is a loan from a credit union, payday loan, or a CFA, the bottom line is the payment history on that account.  But Fico no like-o. 

This is the disconnect with the system and fails to show a true CFA vs a loan from a non-bank source when it shows up on the credit report. 

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[nyyankees877]

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@Cjethompson2017 wrote:

What on earth does that mean?? And why would it have a negative impact on my credit?? Seems a bit odd to me.

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I had a Lending Club unsecured loan from CC debt and a Shefield Financial secured loan for my Jetski. Crazy they consider my Jetski a personal loan when they could repo it if they want!

[Girlzilla88]

I have 3 LOL one for my New AC units I had to replace on my home that were 5 years over Oldest Expectancy lol, 1 from a Vacuum (which I still don't understand why) LOL and 3rd is an actual mini loan I did last year or the year before Idk....but yea honestly I feel like it should be the 1 butttttt oh well XD

[ldkcivilservant]

Single one here from Affirm, PIF, holds my Experian down about 10 points lower than the others and it's the only differance (Affirm only report to Ex)

[Anonymous]

OK let’s think about this from the lender's viewpoint. Why would someone use a finance company and pay a higher interest rate if they were able to use a bank or credit union and get a lower rate?

Now true enough it may be due to ignorance on some peoples part. However for many its because they cannot procure financing at a bank or credit union.

As a consequence when you use a finance company there is a negative marker applied and it does have a negative impact on your score.

It’s just like loan modifications are now negatives in version 9 and will reduce your score. Doesn’t matter if I agree with it, it’s the way it is.

[IPIF]

It makes no sense that when buying a new car someone should be penalized for taking a zero percent promo rate at Honda Financial instead of 2.9% at a credit union.