Thanks to all for the informative replies.
In any event, it will likely drop off of my report towards the end of 2021. On the plus, no more CFA. On the downside, I'll take an AAoA hit.
So it goes ... .
@Hex wrote:
So I’m wondering why would GMAC or Honda Financial want to mess with it's customers like that? Then my cynical side thought- to make it more difficult or less attractive to refi? Just a thought....
They don't have any input into that.
CFA = lender of last resort, and I can see how dealer financing (which goes DEEP subprime in HFS / TFS cases for example as well as lending to gold-plated people) is considered a CFA but there's absolutely nothing available in any consumer facing report that screams "THIS IS A CFA!"
Really there should be of some sort, I'm absolutely confident that my own CFA is from Cashcall, but end of the day I'm probably going to be north of 830 FICO 8 by the end of this year on Experian, CFA = whatever, and I'm already north of 760 on EX FICO 2 talking mortgages.
@Anonymous wrote:Why would Honda Financial code as a CFA when it's clearly an auto (installment) loan?
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That's a good question. There is obviously an asset backing the loan, and the lender probably even holds the title. But auto loans do get listed as CFAs -- not all of them obviously, but generally the captive lender types do.
Better yet, Auto FICO scoring models dislike CFAs even more than most scoring models do. My auto scores rank the presense of a CFA as the second most important negative, while most of my other scores rank it third or lower.
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Not all captive auto financing codes as CFAs. I have two of them at very low interest rates (MBFS and FMC) and neither codes as a CFA.
From the Experian FICO Score Factors Guide:
Consumer finance companies typically grant loans to people with poor credit histories. These are often high-interest loans because the consumer finance company is assuming more risk by lending to people with less than perfect credit. |
By definition, captive lenders don't give Zero Percent Interest loans to people with poor credit histories. Perhaps auto loans at very high interest rates code as CFAs, but low-interest loans given to people with Tier One credit shouldn't!
Yeah, 2.99% is just an awful rate, and 800+ scores are dreadful too.
You might want to read that again. "Typically" and "Often" are subjective. That "definition" of yours doesn't mean anything.
@ridgebackpilot wrote:From the Experian FICO Score Factors Guide:
Consumer finance companies typically grant loans to people with poor credit histories. These are often high-interest loans because the consumer finance company is assuming more risk by lending to people with less than perfect credit.
By definition, captive lenders don't give Zero Percent Interest loans to people with poor credit histories. Perhaps auto loans at very high interest rates code as CFAs, but certainly not low-interest loans given to people with Tier One credit!
@Glen_M wrote:That "definition" of yours doesn't mean anything.
Don't shoot the messenger! It's not my definition; it's from Experian!