I have the dreaded Consumer Finance reason code...

[Anonymous]

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@Anonymous wrote:

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All 5 in 365. One in March, one in September, two in December, and one this month. 

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Gotcha.  So perhaps inquiries 1, 3 and 5 are impacting your score, where 2 and 4 due to bucketing aren't.  I don't know that to be true, but am just providing an illustration of how perhaps 3 are impacting your score.  That being said, my guess is that your score referenced is being held back about 15 points due to the inquires and therefore a lesser number, (say) 5-10 points by the CFA.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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.... which is why I have decided, at least for now, to not reach out to Best Egg and ask them to remove the loan. It was a satisfactory loan with no late payments from 8/17 to 1/19. Originally a 36 month term but I got tired of the high interest. I figure the impact of it being a CFA is less than it being a satisfactory installment loan being that without it, come July, I will have zero installment loans reporting. 

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Why do you expect to have zero loans on your reports in July?

If the loan was closed a few weeks ago, and you do not plan on attempting to get it removed, then you should expect it will be on your report for ten years (i.e. through Jan 2029).

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I was saying if I have it removed, I’ll have zero installment loans come July. 

I have multiple student loans with no lates hitting 10y, my old auto loan that I totaled 2 months after getting it is aging to 10y in March, my Ford repo will be removed in July unless I ask for EE, etc. 

I will basically go to purely revolving history if I have them take this off so while I am not happy about the coding, it’s probably better for my score overall to leave it. 

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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All 5 in 365. One in March, one in September, two in December, and one this month. 

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Gotcha.  So perhaps inquiries 1, 3 and 5 are impacting your score, where 2 and 4 due to bucketing aren't.  I don't know that to be true, but am just providing an illustration of how perhaps 3 are impacting your score.  That being said, my guess is that your score referenced is being held back about 15 points due to the inquires and therefore a lesser number, (say) 5-10 points by the CFA.

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Yeah this seems like a reasonable assumption on the mortgage score but the auto score definitely isn’t happy with the CFA. 

[DollyLama]

I can attest during my journey in 2018, this CFA is not harming your credit as much as you think it is. If anything the collection/PR would be my most damaging concern. 

I had a bona fide finance company loan open <8.9% reporting, with 5 credit cards. All 3 bureaus, FICO 8 were in the 800s, and I boosted over my goal of 760 for a middle mortgage score. Sure I don't like it, but it definitely did not supress my scores as much as I thought it would.

[Anonymous]

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@DollyLama wrote:

I can attest during my journey in 2018, this CFA is not harming your credit as much as you think it is. If anything the collection/PR would be my most damaging concern. 

I had a bona fide finance company loan open <8.9% reporting, with 5 credit cards. All 3 bureaus, FICO 8 were in the 800s, and I boosted over my goal of 760 for a middle mortgage score. Sure I don't like it, but it definitely did not supress my scores as much as I thought it would.

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Thank you for letting me know they aren’t that damaging. I’m guessing the auto score just weighs them more heavily. I won’t worry about it I guess. By the time I am thinking about a house, this loan would be long gone off my reports and I have NFCU so I wouldn’t really be that concerned about getting screwed on an auto loan because of it either.

[Anonymous]

Saeren,

I agree with some of the others and I don't believe you're taking a major hit.  Ally financial(car loans) code as a CFA.  I have one on my report but at the time I was oblivious and never knew any better.  The people here have rearranged my approach to credit.

The CFA reason code comes up on only 2 models for me which both are on Experian.  It has the code shown for my F2 mortgage score and F2 auto score.  I can't find the code on any other models.  As you can see in my signature, I'm at 812 EX FICO 8 and that is after I just had a new account start reporting.  Before this new account started reporting, I was close to max on the FICO 9 models(EQ was844).  The FICO 8 and FICO 9 scores mentioned above were also based after another account that I opened in July.  I'm currently at 832 on the F9 from EX.  

I agree going forward that I won't have another CFA since now I know better.  I feel I have sort of got away with just one CFA but I certainly wouldn't want to test more than one.

[Anonymous]

I guess I will have to see what happens to my scores when EQ and EX catch up to TU in a few months and go from there. 

[ridgebackpilot]

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@Anonymous wrote:

I agree going forward that I won't have another CFA since now I know better.  I feel I have sort of got away with just one CFA but I certainly wouldn't want to test more than one.

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Please forgive the uninformed question, but how can I avoid triggering this code? Is there a way to know in advance what kind of consumer loan is considered a CFA? I recently got a 0%APR auto loan with Ford Motor Credit (which I thought was a good thing?!) and now I'm concerned that may trigger a CFA on my reports...! 

[Anonymous]

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@ridgebackpilot wrote:

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@Anonymous wrote:

I agree going forward that I won't have another CFA since now I know better.  I feel I have sort of got away with just one CFA but I certainly wouldn't want to test more than one.

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Please forgive the uninformed question, but how can I avoid triggering this code? Is there a way to know in advance what kind of consumer loan is considered a CFA? I recently got a 0%APR auto loan with Ford Motor Credit (which I thought was a good thing?!) and now I'm concerned that may trigger a CFA on my reports...! 

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You have a good question but the answer is I don't believe that information is publicly available.  The Metro 2 form(standard form for reporting to bureaus) has an "account type" when filling out information.  I'm not sure how the coding is different for say an auto installment loan that doesn't report as a CFA and one that does and how each bureau interprets that info.  Thankfully these forums exist and is probably our best resource to avoid this in the future based on data from other people's reports.

[Anonymous]

There's no way to know for sure, but a good place to start is the basic idea of what a CFA designation is intended to capture.  And that is a loan that is offered by a store to induce you to buy some big item in the store.  Here are some examples:

*  A mattress and box spring at Mattress Firm

*  A washer/dryer at Lowes

*  A sofa or dining room set at Rooms To Go

*  A TV and sound system at Best Buy

The actual lender is usually not the merchant selling you the item, but a lending company that collaborates with that store.  Such lenders are called Consumer Finance Companies and their loans are called CFAs (Consumer Finance Accounts).

A buyer who has the money to buy it right then has no need for a CFA.  CFAs are designed to appeal to people who typically live paycheck to paycheck and are buying something they don't currently have the money for.  Not surprsingly, such buyers are statistically associated with risk.  FICO therefore chose a while back to build into its models a penalty for people with CFAs.

So to start with, definitely avoid any "financing" offer that sounds even vaguely like the examples above.  The other end of the spectrum from CFAs are loans or credit cards from well known credit unions and banks.

Unfortunately, there is a weird middle ground that some people are reporting as being flagged as CFAs -- products by peer to peer lenders like Lending Club or OneMain or Avant (etc.),  It's unclear what in this gray area will be flagged as a CFA.  And it is quite possible that FICO might flag it as such even if the account on your credit report doesn't call it out as a CFA.

One strategy is to use Google if you are in doubt.  I.e. you are considering getting a credit product from Acme Loans.  Google Acme Loans Consumer Fiance Account.  Also jump on to the forums and ask if anyone knows.