I have the dreaded Consumer Finance reason code...

[ridgebackpilot]

Do we know from past experience whether new car loans at favorable rates from captive finance companies (e.g., Ford Motor Credit, GMAC, MBFS, etc) are generally coded CFAs?

The reason I ask is that I recently opened two auto loans of this type (0% and 1.9% financing). If they both code as CFAs, my scores are due for a "double-dip" of the negative kind...!

[Anonymous]

I wouldn't think that the interest rate of a loan has any bearing on CFA status.  I tend to think the answer would be product [lender] specific, meaning they code as CFAs or they don't. 

[Anonymous]

This whole thing is really annoying... And I did the math and it will actually drop my AAoA under 2y if I have it taken off so I am just going to keep it. 

[Anonymous]

---

@ridgebackpilot wrote:

Do we know from past experience whether new car loans at favorable rates from captive finance companies (e.g., Ford Motor Credit, GMAC, MBFS, etc) are generally coded CFAs?

The reason I ask is that I recently opened two auto loans of this type (0% and 1.9% financing). If they both code as CFAs, my scores are due for a "double-dip" of the negative kind...!

---

Don’t know about Ford specifically but Honda does and I saw Toyota mentioned as likely without confirmation. 

[Glen_M]

You can add me as another data point on the "auto scores do not like CFA's" list.  It would seem to be more important than a lack of recent auto loan history -- and I'm expecting the first short history reason code to dissapear within a year, so this will become the #1 negative.  Right now the other two CRAs list it third, and it shows up on all of my TU and EX mortgage and FICO series 8 and 9 scores.  If I had any idea financing for a new RZR would have been listed as a CFA I'd have just paid cash for the **** thing.

.

[Anonymous]

---

@Anonymous wrote:

This whole thing is really annoying... And I did the math and it will actually drop my AAoA under 2y if I have it taken off so I am just going to keep it. 

---

If you have the option, you may want to rethink this.  What would your AAoA be before/after?  If by dropping under 2 years you mean something like 18 months, that means in 6 months time you'll be back at 2 years.  Say the AAoA loss in crossing that 2 year threshold is 10 points (I don't know that it is, just for the sake of numbers here).  You'd be losing 10 points for 6 months, rather than (say) 10 points for a decade with the presence of the CFA, if we're assigning 10 points to the value of the CFA for the sake of numbers.  Many have theorized that due to the presence of CFAs even after the account is closed that their adverse impact can be felt for 10+ years, or as long as the account is on your CR until it falls off.  Just something to think about.  If both of these events are "worth" 10 points, I'd prefer taking the one that impacts my score for (say) 6 months verses ~10 years or whatever.

[Anonymous]

---

@Glen_M wrote:

If I had any idea financing for a new RZR would have been listed as a CFA I'd have just paid cash for the **** thing.

---

I hear you on that.  When I was at the furniture store I had cash available and had full intentions of buying the sectional I wanted in cash that day, but the salesman roped me into their in-store financing.  He said it would help "build my credit" and since it was a 0% offer, he said just use the cash to pay it off within a couple of months well before the promo financing ended.  It all sounded fantastic to my credit-ignorant self at the time, so I took the bait.  As I stated earlier, though, fortunately the account wasn't ever coded as a CFA... but it very well could have been.

[Anonymous]

---

@Anonymous wrote:

---

@Anonymous wrote:

This whole thing is really annoying... And I did the math and it will actually drop my AAoA under 2y if I have it taken off so I am just going to keep it. 

---

If you have the option, you may want to rethink this.  What would your AAoA be before/after?  If by dropping under 2 years you mean something like 18 months, that means in 6 months time you'll be back at 2 years.  Say the AAoA loss in crossing that 2 year threshold is 10 points (I don't know that it is, just for the sake of numbers here).  You'd be losing 10 points for 6 months, rather than (say) 10 points for a decade with the presence of the CFA, if we're assigning 10 points to the value of the CFA for the sake of numbers.  Many have theorized that due to the presence of CFAs even after the account is closed that their adverse impact can be felt for 10+ years, or as long as the account is on your CR until it falls off.  Just something to think about.  If both of these events are "worth" 10 points, I'd prefer taking the one that impacts my score for (say) 6 months verses ~10 years or whatever.

---

With all of the bad crap falling and my pre-BK installment loans going, I’m looking at a history of 16 months AAoA and nothing but revolving accounts if I remove this one and I can’t do the SSL right now and I’m at max exposure with NFCU for a regular personal loan so I would end up with no credit mix. This would cost me a lot more than 10 points. 

Realistically once my BK falls, that should be at least 80 points (and that’s conservative from what I’ve seen, especially since having my repo taken off got me 54 points back while my BK is still on) and I’m in the garden right now so assuming all else stays the same, I’ll have a 770 score minimum when my BK falls. I think I’ll take that rather than go through the hassle of getting Best Egg to remove the account from my reports. I have no doubt that I could get them to do it, they’re actually very easy to deal with, but the advantage in the long run isn’t worth the damage in the short term since repairing that score drop will be exceptionally difficult with scores below 650 again. And that’s assuming that the drop doesn’t have other deleterious side effects. 

When I went for this loan, it was to prevent having credit reports with nothing but revolving accounts and it still manages to do that even with the penalty. As long as my score goals of 760 are still attainable, I will accept the black mark and be careful in the future. 760 seems extremely likely being that before I added all these new accounts this month I was at 706 on TU after regaining 54 points for losing my repo and lates because a BK is still more costly than a late payment or charge off. 

[ridgebackpilot]

I have to say I find this whole topic really confusing! Why should we be penalized for obtaining credit at favorable rates? Under what tortured logic does that increase our risk profile to lenders?

If we didn't have relatively good scores to begin with, we'd never be offered Tier 1 auto loans and other financing at below-market rates in the first place. Also, favorable interest rates help keep our payments low, also contributing to stability. I just can't see how obtaining favorable APR from a lender can be viewed as increasing risk to anyone...

[redE2move]

I'm a bit confused as well.  I've read thru this post and what I'm trying to figure out is, is it implied that if you have the "CFA code" listed on your credit report it prevents you from getting a mortgage?  

What if you already have a home and want to buy a second home would this code prevent you from getting a second mortage?

If your scores are in the mid 700s BUT you have this code does it prevent you from getting other lines of credit?