"Consumer Finance Account"

[ZiggstergetsaREFI]

My husband and I are preparing to apply for a refi on our mortgage. I just pulled his EQ FICO score from MyFico. Score is 686. The "Understanding your FICO Score" section mentions that one thing hurting his score is that he has 1 "consumer finance account" on his report. This is from an equipment lease we have for our small business. The company is TimePayment Corp. The balance shows $3500. Pays as agrees. No delinquency. Account type: Installment. Industry: Miscellaneous. Descriptions: Lease. Largest past balance: $8622. Date opened: March 2012. Acccount holder: Individual. Scheduled Payment amount: $269. My questions are:

1. How much is this likely hurting his score?
2. Would reducing the balance help the score? (We have some money to pay it down, but it's a lease, so I don't know if it's allowed)
3. Would removing the tradeline entirely help or hurt the score? (Not sure if I can get it removed by TimePayment, but I can try)
4. Would asking TimePayment to change the description make any difference?

Thanks for any input!

[Anonymous]

Just one is not going to hurt your score that much.  Now if you had 20 or so, it could.

IMO, I wouldn't worry much about it.

[ZiggstergetsaREFI]

Thanks guiness56! If I were to pay off, or pay down the balance, do you think that would give me a few points? Or is having the tradeline on there at all hurting the score anyway?

[Anonymous]

It is an installment loan and those are not factored in to your score the way revolving is.

Paying it off may give you some points.  YMMV.  Some have claimed large increases with paying off one, others minimal points.  Others none.

It is just the type of account, CFL, that is considered negative.  Those types of loans are usually for people that can't get credit through a normal bank and would be considered high risk.

I have a large number of them on my reports.  I wasn't aware that the places I was getting these loans were considered to be CFL until about 6 years ago.  They had all been paid off, except 2. 

As far as I am concerned, they are helping me with credit mix and AAoA.  If I lose a point or two for the type of loan, so be it.

[Marcos8]

I apparently have these on my credit report too but have no idea how to find out which TL's they are...how did you find out which TL was the culprit?

[ZiggstergetsaREFI]

Hi Marcos8. It was pretty easy to figure out, because there aren't many open accounts with balances. It is listed as an "Installment" account type, and the Description is "Lease".

[Anonymous]

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@Marcos8 wrote:

I apparently have these on my credit report too but have no idea how to find out which TL's they are...how did you find out which TL was the culprit?

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Sometimes it isn't that easy.  I have seen SL report that way.  Not supposed to but.............

Do you have loans from places like Beneficial, Springleaf, CitiFinancial etc.  Pioneer and Omni for military are CFL.

Basically, any loan through a finance company and not a bank.

Rent to own places are also, RAC, Aarons.