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What's the difference...

Frequent Contributor

What's the difference...

My score dropped a little because one of my credit cards got reported as a line of credit...does anyone know the differenece?

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7 REPLIES
Moderator Emeritus

Re: What's the difference...

This card was already reporting, right?

 

Is there a reported CL, and if so, what is it?

 

If no reported CL, what kind of card is it?

Valued Contributor

Re: What's the difference...

Is the credit card for a revolving Home equity loan?

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
Community Leader
Epic Contributor

Re: What's the difference...

They are both revolving lines of credit, as they provide an appproved limit of credit that you are permiited to use at your discretion, with repayment revolving around the amount of your current usage.  Thus, both are scored as revolving accounts. 

 

One distinction is how the revolving credit is made available to the consumer....either by tapping on the account balance directly with the creditor, or using a piece of plastic to increase the balance. 

 

A more significant distinction is that many LOCs, such as a second trust account, are secured, and thus have lower risk.  However, other LOCs are totally unsecured.

 

I presume that Fair Isaac perceives some difference in risk based on the type of revolving credit, so may score a CC different than an LOC, or they may score secured CCs different than unsecured cards.

 

How specific those distinction may be are all part of the proprietary mystery of their scoring algorithms.

Frequent Contributor

Re: What's the difference...


llecs wrote:

This card was already reporting, right?

 

Is there a reported CL, and if so, what is it?

 

If no reported CL, what kind of card is it?


 

Fidelity Amex, reporting a credit line

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Frequent Contributor

Re: What's the difference...


AndySoCal wrote:

Is the credit card for a revolving Home equity loan?


No, no connection to a home equity loan

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Frequent Contributor

Re: What's the difference...


RobertEG wrote:

They are both revolving lines of credit, as they provide an appproved limit of credit that you are permiited to use at your discretion, with repayment revolving around the amount of your current usage.  Thus, both are scored as revolving accounts. 

 

One distinction is how the revolving credit is made available to the consumer....either by tapping on the account balance directly with the creditor, or using a piece of plastic to increase the balance. 

 

A more significant distinction is that many LOCs, such as a second trust account, are secured, and thus have lower risk.  However, other LOCs are totally unsecured.

 

I presume that Fair Isaac perceives some difference in risk based on the type of revolving credit, so may score a CC different than an LOC, or they may score secured CCs different than unsecured cards.

 

How specific those distinction may be are all part of the proprietary mystery of their scoring algorithms.


interesting it was switching back the next statement, i assume it was an error...

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Moderator Emeritus

Re: What's the difference...


aamex wrote:

llecs wrote:

This card was already reporting, right?

 

Is there a reported CL, and if so, what is it?

 

If no reported CL, what kind of card is it?


 

Fidelity Amex, reporting a credit line


Is the CL high? Depending on the FICO version, some versions will drop the CL and balance from util purposes.