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Defaulted HELOC, only negative on report

Established Member

Defaulted HELOC, only negative on report

We had to move out of state over a year ago.  Within a month, we had a contract on our house.  Bank of America would not process short sale without a default to show hardship.  They take a very long time to approve short sales.  I am now over 1 year in default, but the house is finally going to close.  I am not on the mortgage note, just on the HELOC. The balance is $150k.  Bank of America holds both the mortgage and the HELOC and we have short sale letters for both loans.  They are paying off the HELOC at $6,000.  I'm pretty sure that this is going to show as a charge off.  I have a long and excellent credit record, except for this.  Will my score improve or will the charge off look worse?  

FICO 715 FAKO 739
Chase Freedom 14,500
Chase Slate 6,700
US Bank 14,500
Discover 15,000
3 REPLIES
Valued Contributor

Re: Defaulted HELOC, only negative on report

Your score will go down. If this you only derog I would guess somewhre in the neighbor hood 100 points or so. The socre took hit when the loan first became late.

Equifax My FICO score 814 11/29/2016, Discover TU FICO 807 12/29/2016 Citibank Equifax Bankcard FICO score 827 12/27/2016 Average of Accounts 13 years and no Installment accounts, 1 TU inquiry in 2015
Established Member

Re: Defaulted HELOC, only negative on report

Well, 100 point drop to 550 would totally suck.  Right now, my credit limits on cards are $16,500 $14,500 $6,700  for my major Visa and MasterCard.  Discover dropped me from $9,000 to $3,500.  The cards mentioned earlier used to have $30k credit limits.  Everytime they cut my credit line, my score goes down.

 

I would like to buy a home again sometime.  I guess I'll have to wait a few years, now.

FICO 715 FAKO 739
Chase Freedom 14,500
Chase Slate 6,700
US Bank 14,500
Discover 15,000
Highlighted
Established Member

Re: Defaulted HELOC, only negative on report

Well, we closed and Bank of America charged off the HELOC.  My credit score went from 652 to 717.  My biggest debts are my student loans at over 100k. But, my credit card debt is still at 40%.  Once I pay that down, I should be good to go.  Just need to get it up a little more by the time my lease is up in another 18 months so I can buy a house again.

FICO 715 FAKO 739
Chase Freedom 14,500
Chase Slate 6,700
US Bank 14,500
Discover 15,000