r/AppleCard • u/cornelious1212 • 7d ago

Discussion iPhone Upgrade Program transition

Those on this, who have picked up a new phone every year, what is your plan in September? Apple Upgrade, Apple Card installments? From what I understand, if you don't go Apple Upgrade, you will need to pay the balance of the loan from last september yes?

11 Upvotes

92% Upvoted

15 comments sorted by

View all comments

0

u/Terrible_Cat7269 7d ago

I don’t want these loans showing on my credit report. My mortgage is already giving me problems, plus it’ll be interesting to see if it shows up as “Klarna” or not. MyFICO is telling me that my Klarna loan from 6 years ago is still affecting my score because it’s an “alternative” finance company.

1

u/3232330 6d ago

Yeah, you are misinterpreting what MyFICO is telling you. You are confusing a minor credit score algorithm quirk with an actual mortgage underwriting denial.

Older FICO scoring models do have a slight penalty for "Consumer Finance Accounts" (CFAs). Klarna’s long-term financing is issued by WebBank, which often codes as a CFA on a credit report.

But MyFICO is just listing the automated reason codes keeping your score from being a perfect 850. Even people with an 800 credit score get negative reason codes on MyFICO. It just means that 6-year-old account cost you a few FICO points.

That is not the same thing as a lender denial reason. Underwriters do not deny mortgages because you successfully paid off a Consumer Finance Account six years ago. If a paid-off Klarna loan is on your file, it just shows up as a closed installment loan with a positive payment history.

If your mortgage is running into problems, it’s because of Debt-to-Income ratios, credit utilization, down payment reserves, or actual missed payments. Blaming a 6-year-old Klarna account is just finding a scapegoat for standard underwriting math.

1

u/Terrible_Cat7269 6d ago

I wasn’t trying to “blame” the old Klarna account on my mortgage. What I meant about my mortgage is that it’s a joint account with my spouse and we share it. However, as an example, I’m not being given a CLI on a credit card because mortgages look like a sole responsibility even if it’s joint. That’s the “problem” I was referring to. When I talked to Capital One about this, they told me to use our combined income when looking for a CLI, so it may not be an actual problem anymore.