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Need Advice on Utilization Rate

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praise123
Contributor

Need Advice on Utilization Rate

I refinanced my house to a home equity line of credit a few years ago.  Now, it has affected my utilization rate with Equifax and Experian.  Because it is my mortgage and it was originally 90,000 now 84,000 it makes it appear like my utlization rate is to high.  I applied for credit cards in June and received about 8,000 in credit limits.  I surly dont plan to use these cards but my question is will these help lower my utlitization rate and thus improve my scores.  I will be applying for a mortgage in 6 months.

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pizzadude
Credit Mentor

Re: Need Advice on Utilization Rate


@praise123 wrote:

I refinanced my house to a home equity line of credit a few years ago.  Now, it has affected my utilization rate with Equifax and Experian.  Because it is my mortgage and it was originally 90,000 now 84,000 it makes it appear like my utlization rate is to high.  I applied for credit cards in June and received about 8,000 in credit limits.  I surly dont plan to use these cards but my question is will these help lower my utlitization rate and thus improve my scores.  I will be applying for a mortgage in 6 months.


FICO weighs revolving utilization much more significantly than installment utilizaiton ~ mortgages are always installment loans, and most home equity lines over 20K or so are typically viewed as installment loans as well.

 

If you are looking at scores and advice directly from Experian and Equifax then it is very likely a FAKO and you should not rely on it to help improve your FICO score.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
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