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Credit Card Applications » Questions » User Questions » Other » Does it make a difference to credit agencies what lender issued my credit card or loan?

Does it make a difference to credit agencies what lender issued my credit card or loan?

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Have you been watching a lot of late-night television?  I’m thinking of those commercials where guys in goofy costumes claim to finance anyone who walks in the door, even if they have “bad credit, no credit, any credit!!!”

If those are the lenders you’re thinking of, then yes – it can make a difference. Here’s why:

In the finance world, there are what’s known as captive lenders and general lenders. Captive lenders finance their own products only – auto manufacturers fall into this category. Companies like Toyota or General Motors are treated the same as banks, and are considered “good” lenders in the eyes of the credit bureaus.

General lenders provide outside financing on cars, hot tubs, jewelry – you name it. Loans from general lenders will hurt your credit score because the credit bureaus assume (probably correctly) that you couldn’t get financing from a reputable bank or captive lender. Steer clear of these loans if you care about your credit score.

My advice? Next time you see Dealin’ Doug, Hot Tub Howie, or Diamond Dave shouting about guaranteed financing for bad credit, turn off the TV and snuggle up with your teddy bear – it’s time to get some sleep.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
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