Do consumer finance loans (IE Prosper, Lending Club, etc) count the same towards your FICO score as an auto loan?
My Venture BT offer (0/18/2) is giving me the opportunity to pay off my auto loan AND my Prosper loan (and combine with another 0%, allows me to keep the card below 50% util). If I'm left with no installment loans, I know I'll take a credit hit. So the question is, do I pay DOWN the auto loan, gaining about 24 months of "$0 due" statments, and pay off the Prosper loan, or do I pay off the auto loan, gaining the ability to reduce my insurance premiums and the montly payment on my report, and just pay down the Prosper loan, saving a butt load in interest charges, but no ability to stretch out the term because the payment due each month won't be changed, so the more I pay it down, the sooner it ends and I lose the FICO benefit.
Or, I guess option three would be to pay them both off, take the FICO hit, and get a share secured loan from my CU at some point when I felt like I needed the boost (for example, we're proabbly going to be house hunting in 18-24 months).
What would you do?
Do what makes sense financially.
If money didn't matter you'd pay off the prosper loan and pay down the auto loan from a scoring perspective; doesn't matter to the common classic FICO 8 or even FICO 04 to my knowledge, does matter on some auto enhanced scores and an auto tradeline would be a better one if we used some Michelin-style star rating for installment loans.
That all said, you already know you can sort this with a share secured loan of some sort, so there's absolutely no reason to be stuck in anything higher APR than call it 3%.
If there's generally no scoring difference, then I agree the best thing to do would be to pay off the Prosper loan, from a money-saving perspective.
If I'm paying off Prosper, wouldn't I get another little bump for paying the auto loan down to blow 10%? (I'm at about 40% now).
wrote:Looks to me like you have two questions. The first is a pure Theory question about the FICO scoring models: do they assess consumer finance accounts differently than other installment accounts?
The answer is yes. There are explicit negative reason codes indicating that the mere presence of a CFA is penalized. So in that sense they are different from (say) an auto loan. Exactly which models penalize them and by how much is hard to know for sure.
The second question is Practical, and involves many different decision making considerations, including saving interest, whether you'll have insurance premiums or not, etc. That's obviously more complicated and different people might end up making different decisions, since so many issues are at stake.
Best of luck....
PS. It's not certain to me that any loan by Prosper or Lending Club is flagged by FICO as a CFA. That's one of the mildly frustrating things about the CFA issue: the presence of a grey area where a certain account might be considered a CFA or might not.
Interesting that you say that... I just went and looked at my last direct pull from TU as well as my last 3B from MyFico, and Prosper is just listed as "Unsecured Loan." However, in my MyFico notifications, I have some that say "The total balance on all your Personal Finance Accounts has decreased..." and the balance shown is my Auto and Prosper loan combined.
Good point about the practical vs theory. Yes, paying off the auto loan with allow me to have insurance savings (I could remove comprehensive coverage and stay with collision only). That would gain me about $2-300 over the course of the year. Dropping the auto payment "saves" me ~$4000 per year, which could be put towards the mortgage, or to drop the balance on the Venture that funded all this.
Being an adult is entirely too much thinking on responsibility! 
While CFA's are far too large of a grey area, I know exactly which one is my CFA and even having been closed for 5 years now it's still a complaint. Dirty or pretty scorecards, CFA's are a ding albeit apparently a small one.
Don't really think I'm getting north of 820 with my current file regardless; actually I don't expect much of any increases on FICO 8 once my last EQ inquiry falls off other than AAOA changes in the future or in installment utilization percentage as my mortgage slowly walks down that road.
Would be nice to catch that high installment utilization percentage and my file is likely going to be so boring maybe it'll happen, but it takes a long time to make a dent in mortgage loans.
Edit: don't bother worrying about the interpretation of the report that some things do, you have to look at reason codes to know if you have a CFA and frankly from my scores which qualify for the best rate on virtually everything, it's really not worrying about CFA's.
wrote:Do consumer finance loans (IE Prosper, Lending Club, etc) count the same towards your FICO score as an auto loan?
My Venture BT offer (0/18/2) is giving me the opportunity to pay off my auto loan AND my Prosper loan (and combine with another 0%, allows me to keep the card below 50% util). If I'm left with no installment loans, I know I'll take a credit hit. So the question is, do I pay DOWN the auto loan, gaining about 24 months of "$0 due" statments, and pay off the Prosper loan, or do I pay off the auto loan, gaining the ability to reduce my insurance premiums and the montly payment on my report, and just pay down the Prosper loan, saving a butt load in interest charges, but no ability to stretch out the term because the payment due each month won't be changed, so the more I pay it down, the sooner it ends and I lose the FICO benefit.
Or, I guess option three would be to pay them both off, take the FICO hit, and get a share secured loan from my CU at some point when I felt like I needed the boost (for example, we're proabbly going to be house hunting in 18-24 months).
What would you do?
I would pay off both loans.
From a scoring perspective, yes it would be preferable to pay the auto loan down to 9% rather than zero, but don't keep your car title encumbered just for some FICO points.
