topic Re: Revolving LOC in Credit Cards

Revolving LOC

ariesdreamer — Wed, 27 Feb 2008 05:54:48 GMT

I have a LOC that says its a "Revolving" credit type. It's not mortgage-related. When I applied with BOFA, I applied for the personal loan and when I was instantly approved online, it said "Your line of credit is _____" and I did get 5 choices as to which monthly payment amt I'd like.

I thought this would have fallen under installment loan since there is a fixed monthly payment. I just happened to notice it when I pulled new FICO reports yesterday.

Am I missing something or misunderstanding something?

Another question: I've done a few BTs to the LOC of credit. Most of my accounts show a $0 balance right now and once the CRAs update the remaining accts that I BT'd to the LOC, all of my CC accts will show $0 balance. How will this affect my FICO scores??

Re: Revolving LOC

Anonymous — Wed, 27 Feb 2008 07:02:58 GMT

ariesdreamer wrote:

I thought this would have fallen under installment loan since there is a fixed monthly payment. I just happened to notice it when I pulled new FICO reports yesterday.

Am I missing something or misunderstanding something?

Hi aries,

I will think it same way as you. This is interesting. Have you contact BofA and asked your question? If so what they said?

ariesdreamer wrote:

Your score will go-up by PIF on your CC is sure. But, total with your LOC you are talking about ... I am not sure. Wait for our MODs answers and opinions.

Re: Revolving LOC

haulingthescoreup — Wed, 27 Feb 2008 13:30:48 GMT

Is this a line of credit, or a personal loan for a fixed amount? If it's a line of credit, and that credit remains available after you pay off anything that you've borrowed on it, then it will be treated as revolving.

If you said, "I need to borrow $10K," and they gave it to you, and after you paid it down or off there was no more available credit on that account, that would be a straight installment loan.

That's my understanding on the LOC's though, and that's why they're treated as revolving --you can keep going to the well and pulling more money. Help, other members! did I get that right?

Re: Revolving LOC

Anonymous — Wed, 27 Feb 2008 14:46:40 GMT

haulingthescoreup wrote:
Is this a line of credit, or a personal loan for a fixed amount? If it's a line of credit, and that credit remains available after you pay off anything that you've borrowed on it, then it will be treated as revolving.

If you said, "I need to borrow $10K," and they gave it to you, and after you paid it down or off there was no more available credit on that account, that would be a straight installment loan.

That's my understanding on the LOC's though, and that's why they're treated as revolving --you can keep going to the well and pulling more money. Help, other members! did I get that right?

Yep, perfect explanation.

Re: Revolving LOC

Anonymous — Thu, 28 Feb 2008 07:17:28 GMT

That's good to know. Thanks hauling.

How about aries' second question? Score? Do you think it will go-up or go-down? Any guess?

Re: Revolving LOC

Anonymous — Thu, 28 Feb 2008 07:27:31 GMT

As far as utilization goes, a revolving LOC is scored the same as a CC, so doing BTs to a LOC will not affect overall revolving utilization at all. It will affect individual utilization, however.

The question of whether scores will go up or down in this situation depends on a number of things. Aries, if you wouldn't mind, how many cards do you have, what are their limits, what were the balances on each card before the BT, what are the balances after the BT, and what is the limit on the LOC?

Can't really answer the question about affect on scores without that information.

Re: Revolving LOC

ariesdreamer — Thu, 28 Feb 2008 18:29:47 GMT

haulingthescoreup wrote:
Is this a line of credit, or a personal loan for a fixed amount? If it's a line of credit, and that credit remains available after you pay off anything that you've borrowed on it, then it will be treated as revolving.

If you said, "I need to borrow $10K," and they gave it to you, and after you paid it down or off there was no more available credit on that account, that would be a straight installment loan.

That's my understanding on the LOC's though, and that's why they're treated as revolving --you can keep going to the well and pulling more money. Help, other members! did I get that right?

It's a line of credit that has a fix amount that I pay after I've borrowed from it. I see what you're saying! Thanks for that!

Re: Revolving LOC

ariesdreamer — Thu, 28 Feb 2008 18:38:29 GMT

cheddar wrote:
As far as utilization goes, a revolving LOC is scored the same as a CC, so doing BTs to a LOC will not affect overall revolving utilization at all. It will affect individual utilization, however.

The question of whether scores will go up or down in this situation depends on a number of things. Aries, if you wouldn't mind, how many cards do you have, what are their limits, what were the balances on each card before the BT, what are the balances after the BT, and what is the limit on the LOC?

Can't really answer the question about affect on scores without that information.

The LOC is for $15000. I have 8 CCs but I only transferred 3 CC balances to it which totaled about $2600. The other 5 CCs already had $0 balances on them. I did the BTs a few weeks ago. The balances on those 3 cards prior to being BT'd were (and these are estimates but very close since I'm at work and don't have the exact amts on me!):

Card 1: $600

Card 2: $1500

Card 3: $500

When the CRAs update, I should have $0 balances on all of my CCs. Only the LOC will show a balance, I suppose, along with a student loan that's currently deferred.

Re: Revolving LOC

Anonymous — Thu, 28 Feb 2008 18:52:24 GMT

ariesdreamer wrote:

The LOC is for $15000. I have 8 CCs but I only transferred 3 CC balances to it which totaled about $2600. The other 5 CCs already had $0 balances on them. I did the BTs a few weeks ago. The balances on those 3 cards prior to being BT'd were (and these are estimates but very close since I'm at work and don't have the exact amts on me!):

Card 1: $600
Card 2: $1500
Card 3: $500

When the CRAs update, I should have $0 balances on all of my CCs. Only the LOC will show a balance, I suppose, along with a student loan that's currently deferred.

To give the best possible answer to this question we would need to know the individual limits on each of the three cards in question, but just based on the information you provided, it looks like the BT would probably be a good move for your scores.

Whatever your overall utilization was (which we can't tell from the info you've given), it has not changed. So in that respect, the BT has no effect.

Regarding number of accounts with a balance, you'll be going from 3/8 to 1/9. Even though 3 out of 8 wasn't bad to begin with, 1 out of 9 is even better, so the BT was a good move from this aspect.

Regarding individual util, you will have 17% on the LOC, and 0% on everything else. Again, I think the BT will help your score in this area, UNLESS your CCs have larger CLs than the LOC, which you haven't provided. Assuming that's not the case, though, then you made a good move here, too.

Re: Revolving LOC

ariesdreamer — Thu, 28 Feb 2008 19:00:47 GMT

cheddar wrote:

ariesdreamer wrote:

The LOC is for $15000. I have 8 CCs but I only transferred 3 CC balances to it which totaled about $2600. The other 5 CCs already had $0 balances on them. I did the BTs a few weeks ago. The balances on those 3 cards prior to being BT'd were (and these are estimates but very close since I'm at work and don't have the exact amts on me!):

Card 1: $600
Card 2: $1500
Card 3: $500

When the CRAs update, I should have $0 balances on all of my CCs. Only the LOC will show a balance, I suppose, along with a student loan that's currently deferred.

To give the best possible answer to this question we would need to know the individual limits on each of the three cards in question, but just based on the information you provided, it looks like the BT would probably be a good move for your scores.

Whatever your overall utilization was (which we can't tell from the info you've given), it has not changed. So in that respect, the BT has no effect.

Regarding number of accounts with a balance, you'll be going from 3/8 to 1/9. Even though 3 out of 8 wasn't bad to begin with, 1 out of 9 is even better, so the BT was a good move from this aspect.

Regarding individual util, you will have 17% on the LOC, and 0% on everything else. Again, I think the BT will help your score in this area, UNLESS your CCs have larger CLs than the LOC, which you haven't provided. Assuming that's not the case, though, then you made a good move here, too.

Oh gosh...I forgot to include that! Oops! Here are the CLs for each card:

Card 1: $1000

Card 2: $2000

Card 3: $1000

So the CLs are not that high but I wish it were! Oh, and thanks for the reply!

Re: Revolving LOC

Anonymous — Thu, 28 Feb 2008 19:04:15 GMT

ariesdreamer wrote:

Oh gosh...I forgot to include that! Oops! Here are the CLs for each card:

Card 1: $1000
Card 2: $2000
Card 3: $1000

So the CLs are not that high but I wish it were! Oh, and thanks for the reply!

OK. So to recap:

Before the BT

Card 1 = 60%

Card 2 = 75%

Card 3 = 50%

Cards 4-8 = 0%

After the BT

Cards 1-8 = 0%

LOC = 17%

This is a no-brainer. I'd say to expect a nice little jump from this move. Excellent decision!

Re: Revolving LOC

ariesdreamer — Thu, 28 Feb 2008 19:24:46 GMT

cheddar wrote:

OK. So to recap:

Before the BT
Card 1 = 60%
Card 2 = 75%
Card 3 = 50%
Cards 4-8 = 0%

After the BT
Cards 1-8 = 0%
LOC = 17%

This is a no-brainer. I'd say to expect a nice little jump from this move. Excellent decision!

Hey, that's great news! Yay! That made my day at work.

Re: Revolving LOC

Anonymous — Fri, 29 Feb 2008 08:43:22 GMT

So, aries ... What was APR on your three CCs? Do you really save your money by BT you made?

This is very interesting what you did, and how your score will change. It sounds good with cheddar's opinion.

Message Edited by bunnyrabbit on 02-29-2008 12:43 AM