Hey all (& especially ImTheDevil),
I hope this update helps someone out there in "credit rebuilding" land. This is the follow-up to my novel-long post below from 04/07/19. I was afraid of borrowing money for an unexpected expense from OneMain Financial because of the dreaded CFA account tag showing up & having a negative impact on my credit reports. Here's what I ended up doing & the outcome.
I was pre-approved for up to $4,000 but only needed enough to cover a root canal. I went into the local OneMain office on 04/08/19 & borrowed $1,750 for 36 months. The rate is a ridiculous 36% but it was a necessity & I plan to pay the loan off in less than 12 months. Taking @ImTheDevil's advice, I asked to use my paid off car as collateral rather than do an unsecured loan. Of course, that was no problem. I left their office with check in hand & have waited patiently to see how it would report to the CRA's. Today I recv'd notification that there were changes to my TransUnion & Equifax reports. No update yet to Experian. I was honestly scared to check my scores for fear that they had plummeted due to taking out a loan with a finance company. I was pleasantly surprised!!! The loan reflects on both TransUnion & Equifax as a "secured installment loan". My TransUnion score went up exactly 80 points & my Equifax score went up 85 points!!!!! Whether securing the loan with my car prevented it being tagged as an FCA, I honestly have no idea. It may have reflected as just an "unsecured installment loan" anyway but I'm glad I offered my car for collateral & the account reported as such. Also, just FYI...I've seen several posts where people have complained that OneMain lists the total loan balance (including interest) on credit reports. That is not the case with me. My loan was for $1,750 (plus an admin fee & lien fee on my vehicle) which brought the total amount borrowed to $1,830. That is the exact amount reflected on my TransUnion & Equifax reports.
I just wanted to share this info with anyone who may be in a similar situation & is leary of taking out a loan with OneMain. I can't guarantee anyon'es results will be the same as mine but I'm VERY grateful to @ImTheDevil for making this suggestion. Hope everyone is having a great week & that all the moms on here have a HAPPY MOTHER'S DAY this coming wknd.
"Hey" to everyone. My apologies for the long post. If you want to skip the backstory & go straight to my question, that's fine. I'm just providing the backstory to illustrate that I'm not in my current situation due to irresponsible behavior. The myFICO Forums are a wealth of information & there are so many amazing people here that take the time to help others. Thank you to all those who contribute.
I worked in various financial management positions my entire career. I'm very familiar with credit in general; reports, scoring & terminology. Due to my background, having excellent credit has always been very important to me. However, a few yrs back, my life drastically changed. My mother was diagnosed with a terminal illness, began the evaluation for an organ transplant & moved in with me due to her declining health. Twenty-eight days after mom moved in, I was in a serious car accident. The other driver's brakes failed, he t-boned my vehicle at an intersection & I suffered a broken back, 2 bulging discs in my neck & a concussion. I spent the next 18 months clawing my way back from my injuries while trying to also take care of my mother. I ended up resigning from my position at work during that time. For the next 3 yrs, I was my mother's sole caregiver 24/7 until she passed away. The driver at fault in my accident had excellent full-coverage insurance. They paid the majority of my medical bills, paid off my totaled vehicle & wrote me a settlement check for $50k with no attorney involved. Covering living expenses, my ongoing medical care & my mom's astronomical medical bills while not working was very expensive. I was urged by many to file for Soc Sec Disability. I refused. I was determined to return to work. Thus, I took the tax hit & cashed in my entire retirement account to stay afloat. At the time of my mom's passing, it had become evident that the injuries from my accident, combined with the physical, mental & emotional impact of being a round-the-clock caregiver, had taken an irreversible toll on my body. The realization set in that I would never return to the workforce. I felt depressed & defeated. So, I applied for SSDI benefits, expecting a 2-4 yr battle. Surprisingly, I was approved for full disability benefits in less than 3 months & recv'd my 1st direct deposit (including 12 months back-pay) approx 4 months after applying. Throughout this entire journey, I managed to maintain my credit in good standing. Then, the bottom fell out. I had to have an unexpected surgery on my back. Medical bills mounted &, trying to be responsible (but being foolish in hindsight), I paid them with credit cards. My CC utilization skyrocketed out of control & I was still adjusting to living on a fixed income. It was the perfect storm that sent me spiraling into Ch7 BK.
My current situation & question:
My BK was filed 10/29/2018 & was discharged and closed on 01/30/2019. I have worked relentlessly to make sure that all info is reporting accurately on my credit reports. There are still a few errors but I'm in the process of disputing those & hope to have them resolved in the next 30-45 days. I'm now 48 yrs old & starting over. My car is paid off, savings is practically non-existent & I have a mortgage (with approx $40k in equity) that is my only debt. My mortgage was reaffirmed in my BK & has a perfect/0 late history. I have applied for (& recv'd) only one credit card (Cap1 Platinum unsecured w/$500 limit) since my BK & my total DTI is 27.8%. I bank with NFCU & I had no debt with them in my BK. My Fico 8 scores are 570's across the board but should improve when the Cap1 card starts reporting. Now, another curve ball has been thrown my way. I cracked a molar & am in need of a root canal. That's approx $1,500-$1,700 that I don't have on hand. I spoke with NFCU & they advised waiting until all CRAs are reporting everything accurately & my scores have improved with the Cap1 card reporting before applying for anything with them. My only other option is the dreaded "finance company". I called OneMain on Friday &, since Cap1 is the only inquiry on all 3 of my credit bureaus, I let them do a hard pull over the phone. It was Experian only & I was approved for up to $4,000 @ 36%. I know, RIDICULOUS! But, at the moment, it seems my only option. If I borrow $1,750 for 36 months my pmt will be $84/month. I know the acct would report for 10 yrs as a "CFA" but this will basically coincide with the same 10 yr period as my BK. I also know that over time, the negative aspects will have less of an impact. All of that being said, what would you do in my situation? I'm open to any & all responses. Thanks for taking the time to read my "novel".
Thanks Devil...I never considered the angle of using the car as collateral & it possibly being coded differently. I just assumed unsecured or secured that it would code as CFA. If it will prevent the CFA tag, I'll be more than happy to use my car as security for the short term. Plan to pay the loan off in less than 36 month anyway. Will give them a call in the morning. I appreciate your feedback. Thanks again!
Thank you again! Hopefully, I'll get the same reporting result as you did. Maneuvering through the maze of credit do's & don't's gets crazier everyday. It's changed a lot in the few yrs since I worked in consumer credit. I'll call OneMain tomorrow & see if they can give me an answer as to how it will report & then post back here. *Also, if I'm told one thing & it ends up reporting differently, I'll post that at a later date as well.