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Does using finance companies instead of banks or mortgage companies adversely affect your credit score?

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Wiki User
2008-06-24 20:00:52

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.


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