@Anonymous wrote:I've just came across this forum because I was in the process of applying for a Samsung Financing to make a big purchase for 0% with the intent of paying it off in 12 months. I've never paid attention to the term consumer finance account and always thought it was in the same ballpark as a credit card. I've read a few comments that this type of credit is considered riskier and have a bigger impact on your Fico score...Is that really true and why have I not seen in listed as a factor on my Fico score? I have quite a few consumer finance accounts such as Lowe's, Home Depot, Dell Financial, Synchrony Home, Banana Republic, etc but never seen those as a factor in my score. My score has improved from the low 600's a few months ago in June to 722 today because I've managed to bring down my credit cards utilization from above 90% to 24%. I am just wondering if my excessive debt was a bigger factor than the multiple consumers account to be listed...
Those are all store cards or store accounts issued by banks, so they wouldn't be consumer finance accounts. Lowe's, Home, and Banana Republic are all issued by Synchrony, Home Depot is issued by Citi, and Dell is issued by Web Bank. As I understand it, a consumer finance account is a trade line issued by a lender that, unlike a bank, does not take deposits. I think that one reason FICO penalizes consumer finance accounts is that, like the Samsung line you're considering, they're often taken out at a retailer to spread out the cost of a larger purchase, which FICO takes to be a possible indicator of financial difficulties.
@Anonymous wrote:Thanks for the information. Would a car loan be considered a consumer finance account? Or those pay day loans that charged you a rediculous amount of interests? I've had many auto loans especially in my younger years always trading in my new car for another one every year as well as my fair share of personal loans that I've managed to paid off...I'm just surprised to read about those just now...
Car loans can be, depending on the lender. One financed through a CU or a bank obvs wouldn't be, but loans through auto makers' financial arms, e.g. Toyota Financial Services, are. I think the loans you can get at those semi-shady used car lots can be, too. I don't think payday loans would count since afaik they don't report to the bureaus in the first place.
