I have the dreaded Consumer Finance reason code...

[Queen_Etherea]

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@Anonymous wrote:

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@Pikaboo-icu wrote:

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@Anonymous wrote:

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@Pikaboo-icu wrote:

All I can say is: I am so very sorry!!!

You know my fight with this and I feel your pain and anger!  

I'm still getting emails (last two Fridays) that they are "still working on my issue" with their specialty dept.

I really feel for you- and Relevate and ALL of us that have fallen to the CFA debacle.

I believe it's completely unfair to not inform consumers BEFORE they use that type of financing that will code this way.

I still have a FTC complaint, now that govt is open again, I will likely follow through, even if Affirm removes them.

People need to make informed credit decisions and they need to be informed when they're signing on the dotted line for a CFA product and that said product can/will be detrimental to their credit, even when paid as agreed.

So sorry!!   

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It really is infuriating but I am starting to cool down... I had to avoid this thread earlier because I was seriously ticked off... but I am calming down now. The bottom line is that my credit is still much better than it was (that TU FICO was 647 in September) and I haven’t been turned down for the credit products that I have truly desired to have. If I was going to be buying a house, it would be an issue. 

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Here's a strange note that fits in with your theory that CFA's don't start becoming a problem until the score starts rising..

Your Mortgage Fico is over 700 and that's where the CFA notation shows up..

It sure seems to fit your theory..

I'm glad you calmed down over it..

It shouldn't hurt you too much as you had only one. It's just rotten they don't warn people..

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Yep I had a feeling that my theory was right. We will probably see some very ticked off members when their Affirm loans start pushing up as the baddies go off. But it doesn’t show up on FICO8 or FICO9 so it’s also gonna take a myFICO or CreditWorks Premium to see as well. 

They really should be forced to disclose the damage a CFA can do to your credit and if I decide to really take issue with it, I may file complaints with the CFPB and my state AG over the deception that the credit bureaus are doing with these accounts. But for now it’s too much work. 😔 

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Ok so this is weird... a couple of days ago my mortgage score was 649 and the CFA reason code was there. Now, my mortgage score is 635  and the CFA reason code has disappeared. So maybe you're right, but I think it starts affecting your mortgage score when it's in the 600's. I have no idea which one of my accounts would even be a CFA and I've tried asking on this forum, but no one else seems to know either. OMG! It's my old auto loan! It was with CIG Financial, which is a company that caters to people with crappy credit. I am seriously relieved to have finally figured this out.

I mean, CIG Financial was awesome when I contacted them about my one late payment. They emailed me back almost instantly and said they would remove the late payment. The guy kept apologizing to me because the stupid CRA's wouldn't remove the lates no matter how many times he sent in the request, but they're finally gone and I will forever be grateful to them! They really went above and beyond to get that late payment removed.

[Anonymous]

To summarize:

Why do people get bent out of shape about this?  Answers:

(1) Transparency. 

            (a) It's one of the few scoring factors that FICO has completely hidden from its educational materials.  FICO is otherwise good about explaining that if you are late or run up your credit cards (etc.) it will hurt you.  They drop the ball here in that a consumer has no way to know that taking out a certain kind of loan and making steady perfect payments on it could harm their score.

            (b) Once the harm is done it can be very difficult to discern which account is the offending account, even by careful inspection of one's full credit reports.  This is in contrast to lates, high utilization, where it is usually very clear what accounts are causing harm.

(2)  Repairing the problem.

Even if you can later discern what the offending account is, it can be very difficult to fix, even by the simple use of time.  The spirit behind the 7-year laws for derogs was to mandate that CRAs could not keep a past event haunting your score for more than approx 7 years, with the rare exception of bankruptcy.  Because of the lack of transparency, however, there's no acknowledgement that that this closed account is harming you -- and therefore it can ironically be much easier to fix a collection (where you grossly failed to meet a financial obligation) than to fix a CFA (where you have a perfect payment history).  A CFA with perfect payments for 36 months will harm your score for 13 years!  The collection can be fixed with a PFD agreement in a few months.

How much harm do CFAs do?

It's really hard to make a guess.  They do some harm for sure because of the negative reason codes.  But no score theorist here (understandably) wants to add a CFA to his report to test the effect -- because it could take him at least 10 years to get it off.  That's in contrast to the vast amounts of solid replicable test data that we have on (say) the effects of credit card debt.

The most useful scenario for testing (and these are hard to come by) is when a person has a definite CFA on his report and it is about to fall off.  I think there was a case of that a few years ago and the difference appeared to be substantial (if my memory is right and maybe it isn't!) but that was one anecdotal uncontrolled case that is almost impossible to repeat. 

So as far as I can tell we just have no good way of knowing how much CFAs can hurt a person and under which circumstances (e.g. are thin or young profiles hurt more?  do the mortgage models care more than FICO 8? etc.).

[Anonymous]

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@Queen_Etherea wrote:

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Ok so this is weird... a couple of days ago my mortgage score was 649 and the CFA reason code was there. Now, my mortgage score is 635  and the CFA reason code has disappeared.

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Well, this doesn't make any sense above.  It seems that something else changed on your report, as I'm sure the removal of a CFA would not cause a 14 point gain.  Perhaps a 14 point loss, but not a gain.  That being said, you're looking for a different score-changing event that actually increased your score (say) 28 points... using the numbers I gave above as an example, of course.

[Anonymous]

I think we could do some pretty good guesswork involving the potential impact of a CFA if the person with the CFA had a 100% clean report and ideal utilization.  Of course not apping for credit recently (inquiries) would be nice as well, removing more variables.  When taking it down to just factors like age of accounts, you can usually come up with a fairly accurate prediction of what one's score may be in comparing it to similar profiles.  It would of course all be guesswork.

I agree that having one fall off would be the best way to see the potential score change.  Of course with one falling off it would impact AAoA at the same time (and possibly AoOA) which could add 1-2 more variables that reduce the net score gain.

Another way to get an idea of the potential impact would be to find someone that has a CFA that's not reported to all 3 bureaus and compare the bureau(s) score with/without it with one another. 

[Anonymous]

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@Anonymous wrote:

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@Queen_Etherea wrote:

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Ok so this is weird... a couple of days ago my mortgage score was 649 and the CFA reason code was there. Now, my mortgage score is 635  and the CFA reason code has disappeared.

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Well, this doesn't make any sense above.  It seems that something else changed on your report, as I'm sure the removal of a CFA would not cause a 14 point gain.  Perhaps a 14 point loss, but not a gain.  That being said, you're looking for a different score-changing event that actually increased your score (say) 28 points... using the numbers I gave above as an example, of course.

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Hi BBS.  Do we know in fact that the CFA left the report?  Is it not more likely that the reason code is still there, but is being ranked at (say) #5 -- which would make it invisible, since only the top 4 negative reason statements are shown?

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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I thought that these older score models were much more damaged by new accounts than the newer models? If that’s the case, the CFA is more damaging than all of the new accounts I’ve added. That seems very easy to quantify as “significant”

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Do you mean much more damaged by new CFA accounts in your first sentence?  If so, I have no idea if that's the case and can't speak on it. 

Anyway, "significant" is a vague term, not able to be quantified and can vary greatly from person to person.  People on this forum all the time talk about "significant" score changes, where their scores "tanked" and half the time they're talking about a single-digit number or barely a two-digit point change.  From my perspective, such changes aren't significant, but perhaps they are for someone else.

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No, I meant new accounts period. I would have thought the fact I have added 10 revolving accounts in the last 11 months, with 5 from December to January when I pulled that report, would be a higher scoring penalty than it appears to be on my auto score which is why I believe the CFA to be very damaging. 

[Anonymous]

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@Anonymous wrote:

I think we could do some pretty good guesswork involving the potential impact of a CFA if the person with the CFA had a 100% clean report and ideal utilization.  Of course not apping for credit recently (inquiries) would be nice as well, removing more variables.  When taking it down to just factors like age of accounts, you can usually come up with a fairly accurate prediction of what one's score may be in comparing it to similar profiles.  It would of course all be guesswork.

I agree that having one fall off would be the best way to see the potential score change.  Of course with one falling off it would impact AAoA at the same time (and possibly AoOA) which could add 1-2 more variables that reduce the net score gain.

Another way to get an idea of the potential impact would be to find someone that has a CFA that's not reported to all 3 bureaus and compare the bureau(s) score with/without it with one another. 

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There is such a person on these very forums. Go look at pikaboo-icu’s scores. Her EX has her Affirm loans and her reports are the same otherwise. It’s a pretty big difference. As of her current signature, her EX is 24 points less than EQ and 35 less than TU. She had multiple loans through Affirm though so that could be an additional damage factor. 

Its exactly like CGID says. The lack of transparency and the ridiculous amount of time that you have to deal with the loan ramifications are what the big deal is. If it was known up front that Best Egg would code CFA, I NEVER would have gotten that loan! I didn’t need it!

[Anonymous]

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@Anonymous wrote:

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@Anonymous wrote:

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@Queen_Etherea wrote:

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Ok so this is weird... a couple of days ago my mortgage score was 649 and the CFA reason code was there. Now, my mortgage score is 635  and the CFA reason code has disappeared.

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Well, this doesn't make any sense above.  It seems that something else changed on your report, as I'm sure the removal of a CFA would not cause a 14 point gain.  Perhaps a 14 point loss, but not a gain.  That being said, you're looking for a different score-changing event that actually increased your score (say) 28 points... using the numbers I gave above as an example, of course.

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Hi BBS.  Do we know in fact that the CFA left the report?  Is it not more likely that the reason code is still there, but is being ranked at (say) #5 -- which would make it invisible, since only the top 4 negative reason statements are shown?

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And that’s exactly the point that I was making when I came up with my theory — the reason we don’t see as many complaints on here about CFAs, besides them only showing up on mortgage and auto scores, is because a lot of the people who have taken them have lower scores so the negative reason code is pushed down by something else. I didn’t see these til I got my last lates taken off my TU and that’s also why I haven’t complained about EQ and EX yet. It’s going to be misery time all over again when those show up later this year. 

[Anonymous]

CGID, good call and it could be the case that the reason code for that member was pushed to 5+ on the list, making it invisible. All the more reason on their profile to suggest that its impact isn't all too significant, relatively speaking.

[Revelate]

Not sure where this confusion comes from other than what explicitly counts as a CFA as unfortunately there doesn’t seem to be a notation at least in the reports we have access too... I have always assumed they are pattern matching on lender name.

Anyway it is a minor negative reason code, I don’t think any lenders rationally care and to be absolutely concrete I got my mortgage with a CFA on my credit reports so that isn’t a concern.

Just FICO with their analytics found that people with a CFA on their account were at somewhat higher risk of default.

With so many things being tagged as a CFA these days I suspect they will be removed as a penalty in some future algorithm, but sadly until the GSE’s change their underwriting we are stuck with the old algorithms.