I have the dreaded Consumer Finance reason code...

[Anonymous]

CGID, in looking at the potential CFA examples you gave above, it's also possible that some of those retailers would push their CC on the customer.  Best Buy (Citi) and Lowe's (Synchrony) from what I've come to understand are quick to push these major bank-backed products to those looking to "finance" a bigger purchase.  

I guess my question here is what best practices can be followed to know if you're apping for a CC or a CFA?

[Anonymous]

Great point, BBS.  Store reps often do push people to apply for that store's credit card.  Target reps are always trying to get me to open a Target card, for example.

The store card (once approved) can be used for all kinds of items at that store.  A CFA in contrast is a financing agreement tied to that one big-ticket item.

At least that's my understanding.

Thus a credit card (even a store card) is probably safe, whereas an installment product intended to provide "financing" for some big item (buy this bed today!  no payments for the next 18 months!) is likely not.

[MakingProgress]

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@Anonymous wrote:

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).

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Can I safely assume that in the examples you listed you are not referring using the Lowes credit card issued by Sync, or the Best Buy credit card issued by Citibank, and you are referring to another type of financing these merchants might offer to customers who can't get these credit cards?

ETA:  I see you and BBS have already answered my question. 

[Anonymous]

What I don’t understand is how the CRAs aren’t required to disclose accounts marked as CFAs since they are harmful to your score. There are only two things on my report that could ever be listed as a CFA - my Best Egg loan and my Amazon Store Card (remember - these cards DO have those deferred interest offers that you would get in a store depending on the size of a purchase) and I have no way of finding out which one is doing it without going on the data points that suggest it’s the personal loan. That’s a bit ridiculous. 

[Anonymous]

Virtually certain that the CFA is not the Amazon credit card.  First, it is a credit card.  Second, it is a major credit card (has a VISA logo on it).  Third, it is backed by a major bank (Chase).  All three together makes it virtually impossible that the Amazon card is the problem.

The Best Egg loan in contrast has all the hallmarks of a CFA.

The transparency concern for me is less with the CRAs, but rather with FICO.  It's fine that they want this to be a penalty in their model, but they do a terrible job at alerting consumers of this fact.  In other respects FICO does a good job of empowering customers with the basic knowledge of how to protect and improve their score.  The CFA issue is completely hidden from consumers until it is too late.

[Anonymous]

The Amazon Store Card is not a credit card, it’s a Synchrony store card and it has 0% interest offers ranging from 6-24 months that are the same things FICO doesn’t like consumers using. I doubt that it’s coded as CFA as well but if taking deferred interest offers is what traditionally got CFA attention before, the store card definitely fits the criteria more than my 18.9% interest personal loan does. 

I am still betting it’s the personal loan but again, there is no way for me to know that it’s not the store card or even both of them and that’s what I take exception to. 

[Anonymous]

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@Anonymous wrote:

The Amazon Store Card is not a credit card, it’s a Synchrony store card and it has 0% interest offers ranging from 6-24 months that are the same things FICO doesn’t like consumers using. I doubt that it’s coded as CFA as well but if taking deferred interest offers is what traditionally got CFA attention before, the store card definitely fits the criteria more than my 18.9% interest personal loan does. 

I am still betting it’s the personal loan but again, there is no way for me to know that it’s not the store card or even both of them and that’s what I take exception to. 

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No way that is it.  It is your Best Egg loan.

A Consumer Finance Account code/designation is provided in the Credit Reporting Resource Guide only for Portfolio Types that are installment loans.   See Exhibit 1 of the Credit Reporting Resource Guide for permissible Account Type field codes for each Portfolio Type. 

There is no Account Type of consumer finance account under a Portfolio Type of revolving credit.

[Anonymous]

A Consumer Finance Account code/designation is provided in the Credit Reporting Resource Guide only for Portfolio Types that are installment loans.   See Exhibit 1 of the Credit Reporting Resource Guide for permissible Account Type field codes for each Portfolio Type. 

There is no Account Type of consumer finance account under a Portfolio Type of revolving credit.

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

The Amazon Store Card is not a credit card, it’s a Synchrony store card and it has 0% interest offers ranging from 6-24 months that are the same things FICO doesn’t like consumers using. I doubt that it’s coded as CFA as well but if taking deferred interest offers is what traditionally got CFA attention before, the store card definitely fits the criteria more than my 18.9% interest personal loan does. 

I am still betting it’s the personal loan but again, there is no way for me to know that it’s not the store card or even both of them and that’s what I take exception to. 

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No way that is it.  It is your Best Egg loan.

A Consumer Finance Account code/designation is provided in the Credit Reporting Resource Guide only for Portfolio Types that are installment loans.   See Exhibit 1 of the Credit Reporting Resource Guide for permissible Account Type field codes for each Portfolio Type. 

There is no Account Type of consumer finance account under a Portfolio Type of revolving credit.

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Cool. Then I’ll wait and see what happens in July when EQ and EX catch up to TU with regard to dropping my repo and late payments and see if the CFA reason code pops on them too. 

[Anonymous]

A Consumer Finance Account code/designation is provided in the Credit Reporting Resource Guide only for Portfolio Types that are installment loans.   See Exhibit 1 of the Credit Reporting Resource Guide for permissible Account Type field codes for each Portfolio Type. 

There is no Account Type of consumer finance account under a Portfolio Type of revolving credit.

[Anonymous]

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@Anonymous wrote:

What I don’t understand is how the CRAs aren’t required to disclose accounts marked as CFAs since they are harmful to your score. 

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Well, technically all accounts can be harmful to your score.  I get what you're saying though. 

I think in the grand scheme of things, CFAs really aren't that harmful.  An impact of (say) 5-10 points really isn't significant and that's why we don't hear about these issues more.  If CFAs dropped scores something more significant like 25-50 points, no doubt there would be much more exposure on them and the general public would be much better informed IMO.

Back in 2013 I financed some furniture from a local store and they roped me in with their in-store financing.  This was of course long before I knew anything about credit (2015) so I took the bait.  The furniture store used Wells Fargo Financial for their financing, but I never received a credit card or anything.  Looking back, it had all the makings of a CFA, but the account was coded as a revolver and I never experienced any CFA negative reason statements.  I suppose I got lucky when it came to that account.

[Revelate]

Store cards are not CFA's from tons of reports here.  Certainly Synchrony is not nor is Chase as mentioned earlier: I have both on all 3 reports and only the CFA tag on 2, specific to the stupid loan that I have which reports to only EX/EQ.

In general to my knowledge a CFA is only considered for loan types, that said what is a CFA and what isn't changes over time but at some point if they were to start lumping in a bunch of revolving accounts suddenly almost everyone would have a CFA tag and that would exclude the data from having any meaning.

That wouldn't be a bad thing imo, really I think they need to do away with the CFA tag entirely personally but they aren't going to modify the old algorithms for that.