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Posts: 2
Registered: ‎01-26-2013
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HELOC or HEL: Which is better based on affect on credit score

My current FICO is 814.  I have one mortgage (113,000 in equity), one car payment with 3.5 years remaining, and one credit card (paid off monthly).  I would like to do some home repairs totalling about 8 - 10K and am considering either a HELOC or HEL.  At the very least I don't want my FICO to drop, and hoping it might even get better by taking on some very containable debt.  Any suggestions on whether a HELOC or HEL would be better from the perspective of affecting my credit score?  Why?  Thanks!

Valued Contributor
Posts: 3,302
Registered: ‎06-09-2010
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Re: HELOC or HEL: Which is better based on affect on credit score

Either way it will have some impact.

New account, new INQ, new debt. All three will cause some change.

As long as you stay in good standing you should bounce back fairly quickly 6-12 months.

Just a thought, some people also just decide to do a cash out refi since rates are as low as they are. But you have to determine the long term expense.
Good Luck
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New Member
Posts: 2
Registered: ‎01-26-2013
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Re: HELOC or HEL: Which is better based on affect on credit score

Thanks for this info.  I assume, when you say 'change', you mean a decreased score.  I've seen some simulators that actually increase my score for a hel of 10k.  A mystery to me why this would be so. 


As for cash-out refi, I just did that a month ago to get a better rate and pay off a higher-rate cc debt at the same time.  If I understand what I've read correctly, applying for a HEL so soon after a refi may also ding me?  I wonder how long I'd have to wait to avoid that ding....

Super Contributor
Posts: 7,915
Registered: ‎07-03-2007
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Re: HELOC or HEL: Which is better based on affect on credit score

heloc is revolving

hel is installmant


i would think that if you got a heloc, you wouldn't want to max it out.....


if you have the option, you can get the heloc and then convert it to a installment account once you are done drawing off of it.


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