Was reading excerpts from a blog written by Dana Neal, author of a book entitled "Best Credit:How to win the credit game" In a section he states the following..
"The quality of the lender also matters. There are captive and general lenders. Auto manufacturers are captive lenders—they loan money on their product only; the FICO scoring model treats them the same as a bank, which is good. Credit from auto manufacturing companies such as Toyota Motor Credit and General Motors is fine. But be wary of outside dealer financing; it's often from a finance company. Finance companies, unlike banks, are general lenders; they loan money on anything and are to be avoided because they will hurt your FICO score.
FICO's scoring algorithm attempts to detect if a consumer is making poor credit decisions—that is, getting poor credit terms such as paying a higher interest rate. It's assumed, with some merit, that consumers who use general lenders are making bad credit decisions, and thus any lender that has “Banc” or “Finance” in its name will lower your credit score."
This true?
TO
