Does using finance companies instead of banks or mortgage companies adversely affect your credit score?
Your credit score could be adversely affected by using 2nd tier
lending sources, such as finance companies for loans. If you
successfully repay the loan and it reflects as a positive account,
it will not generally reduce your score, but it may not provide
much of a boost either. If you do miss a payment, it substantially
reduces your score.
Using finance companies is a signal to credit bureaus that you
are either unable to obtain a traditional mainstream loan or that
you are making a bad choice. Your credit scores will generally drop
when obtaining finance loans.