What is "consumer finance accounts"

[lord_kinbote]

I recieved an app decline based on "too many consumer finance accounts".  Can someone please define this?  I only have a couple of revolving accounts currently, and just mortgage/car that are both closed after being paid off, so I am not sure what this is in reference to.  Does this have the potential to refer to a child support case?  I have that on my report, but it shows all ontime payments and not negative - listed in "other" accounts when I pull CR.  Thanks in advance for clarification.

Source: US Bank.

[Anonymous]

What did you apply for?  What revolving accounts do you have?  Grats on paying off your mortgage and car

[Revelate]

Usually you get them from in store financing; say I were to have financed my overly expensive bed (which admittedly I do not regret in the slightest, good night's sleep is priceless and I'm sleeping better than ever heh) on their 6 month 0% APR promotional offer - I would've likely gained a consumer finance account on my reports.

Didn't want that and I could write the check for the bed anyway at the moment, so simply tossed it on one of my CC's, but that's an example of a typical consumer finance account.  

Have seen that notation on some other reports too, not certain anecdotally what triggers them though I believe some store cards may be listed as consumer finance as well.

[AirlinerDudeB6]

I agree with Revelate...in my case it was furniture.

I purchased an entire apartment worth of furniture when I had my first apartment back in 2003 at a closeout furniture type store and took advantage of the no payments/no interest for 12 months (broke college kid).

CitiFinancial was the lender and ScoreWatch always had it in the "factors affecting your FICO score"  as Consumer Finance Account...I don't remember if I got a score bump when it dropped off though.

[HiLine]

I've been wondering about this ... Thanks for the clarification.

So what exactly is bad about having consumer finance accounts?

[CreditDunce]

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@HiLine wrote:

I've been wondering about this ... Thanks for the clarification.

So what exactly is bad about having consumer finance accounts?

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Nothing is bad about having consumer finance accounts.  It is just that FICO has found a correlation between people who have more consumer finance accounts tend to default more than people who don't use them.  Probably because if you have other options or can pay in cash, you will use less of the consumer finance accounts.

If you are getting this alert and you have other CC's, it probably means you need to let your accounts age some.   Just because they give you a reason doesn't mean that is the main reason you are being denied.   It can always be account age or other derogs that aren't mentioned.