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It is having a finance company as one of your lender’s in your credit report.


John was taking out a mortgage and had a 717 FICO Score. He wanted to get above 720 so that he could save over $2,000 in loan fees. He noticed a finance company as one of the factors lowering his FICO Scores. He tried without success to identify the lender and remove it. It was a loan associated with his Toyota truck. AS a result, he had to pay more money for his mortgage because of this issue.


How Does It Impact Your FICO Scores?


FICO often lists this as one of the issues lowering your FICO Scores; “Too Many Consumer Finance Company Accounts.”What is a finance company, how much does a finance company lower your FICO Scores, and how long does it lower your FICO scores? Let’s walk through this.




A finance company account is usually a high-risk lender that lends to those with below average FICO scores. However, they are often found in your credit report even if you have a 750 or an 800 FICO score. Finance Companies can be pay day lenders, a lender which offers 90, 180 day and even one year same as cash options for retail stores, or many small auto dealerships that have an inhouse lender tailored to help finance auto loans for consumers with low FICO scores. Some examples include Wells Fargo Finance, Main Street Finance (formerly Citifinancial) and Security Finance. 


Identifying a finance company is hard. It is the three credit bureaus that classify a certain lender as a finance company and those lender classifications are kept confidential by the credit bureaus. So, in many cases, we do not know which lender is a finance company. FICO will just say there is a finance company in our credit report that is lowering our FICO scores.


How Much / Long Does a Finance Company Lower Your FICO Scores?


Up to Ten Years. The impact to your FICO Scores depends on each individual report and there is some variance. Nevertheless, a finance company will lower FICO Scores between 12 to 15 points on average the entire time that lender account remains on your credit report. If you have a 750 FICO Score without a finance company in your credit report, it will be 735 with a finance company in it.


How Can You Avoid a Finance Company Account?


This is the most difficult task because of the lack of information readily available to you and me. It is best to get loans through banks and credit unions, or other reputable lenders such as a store account, like Home Depot, Lowes, Macys, or Walmart. Do not take offers to have the dealership self-finance an auto loan. Work to get an auto loan (or any loan) through a reputable auto lender. 

Finally, avoid pay day lenders. Such lenders as mostly classified as a finance companies and will do a lot of harm to your FICO Scores.  

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