topic Re: OUCH! HELOC included in UTIL calculation. in Understanding FICO® Scoring

OUCH! HELOC included in UTIL calculation.

Anonymous — Wed, 08 Jun 2016 03:14:54 GMT

New HELOC TL from DCU reported today on EX and caused my UTIL to go from 7% to 31%. I drew 45K out of 95k for a home remodeling job. Read somewhere that if TL > 50k then wouldnt be included in UTIL - which turned out to be false in my case.

Under account type - it said real estate loan and term - it said revolving.

Good thing is that FICO 8 score only dropped 4 pts!

I will update in 9 days when I will pull EQ and TU and report back on how the other 2 Treat HELOC..

Re: OUCH! HELOC included in UTIL calculation.

RonM21 — Wed, 08 Jun 2016 10:37:20 GMT

I'd also be interested to see how the other two report. Your right, at least it was only a minimal drop.

Re: OUCH! HELOC included in UTIL calculation.

Anonymous — Wed, 08 Jun 2016 11:43:20 GMT

I wonder if "revolving" is a mistake and if it should read installment? Anyone know?

Re: OUCH! HELOC included in UTIL calculation.

Anonymous — Wed, 08 Jun 2016 17:38:36 GMT

@Anonymous wrote:
New HELOC TL from DCU reported today on EX and caused my UTIL to go from 7% to 31%. I drew 45K out of 95k for a home remodeling job. Read somewhere that if TL > 50k then wouldnt be included in UTIL - which turned out to be false in my case.

Under account type - it said real estate loan and term - it said revolving.

Good thing is that FICO 8 score only dropped 4 pts!

I will update in 9 days when I will pull EQ and TU and report back on how the other 2 Treat HELOC..

It's also false in the case of a friend of mine who has a large HELOC on her primary residence that she uses for managing her rental properties. It's always been included in revolving.

Re: OUCH! HELOC included in UTIL calculation.

EW800 — Thu, 09 Jun 2016 00:23:48 GMT

Would anyone know if perhaps the over $50K CL not counting in Util may no longer be the case? I have a Discover card that is now over $50K and from all that I can tell the TL is still counting in my Util. Thoughts?

Re: OUCH! HELOC included in UTIL calculation.

Kidcat — Thu, 09 Jun 2016 02:22:09 GMT

My understanding is that it is included in revolving utility but your score is not impacted over a certain threshold =/- $50k

Re: OUCH! HELOC included in UTIL calculation.

Anonymous — Thu, 09 Jun 2016 16:44:50 GMT

My HELOC balance is over 50k and type shows "Revolving". I believe to lenders that are using FICO8 the HELOC's do not impact util that much because those models are smart enough to exclude HELOCs. I did recently apply for a Fidelity rewards card and the lender (Elan) uses the older FICO scores which are much like the mortgage scores so they saw my util as very high because of the HELOC and I was declined due to high util (although my CC util is ~25%).

Also, the negative with a revolving HELOC is that if you apply to do a re-fi (which I recently did), the older scoring models penalize you greatly for having a utilized HELOC, so my mortgage scores were 40-50 points below FICO8 due to HELOC so I did not get the best rates. Luckly, I did get my re-fi and have paid off my HELOC so I am hoping this improves my mortgage scores going forward.

Re: OUCH! HELOC included in UTIL calculation.

iv — Thu, 09 Jun 2016 21:49:27 GMT

@Anonymous wrote:
New HELOC TL from DCU reported today on EX and caused my UTIL to go from 7% to 31%. I drew 45K out of 95k for a home remodeling job. Read somewhere that if TL > 50k then wouldnt be included in UTIL - which turned out to be false in my case.

Under account type - it said real estate loan and term - it said revolving.

Good thing is that FICO 8 score only dropped 4 pts!

I will update in 9 days when I will pull EQ and TU and report back on how the other 2 Treat HELOC..

How HELOCs are displayed in any particular reporting/monitoring product and how they factor into FICO scores are not the same...

I have a large HELOC ($200k, 97% util), and it is not factored into FICO (or Vantage) scoring as revolving utilization.

But how various reporting interfaces choose to display the data varies...

Here on MyFICO, it shows the HELOC as a mortgage loan on TU, and as a revolving account on EQ and EX - but it doesn't factor the HELOC into the "Ratio of Your Revolving Balances...) infobox on any of the three.

On Discover's creditscorecard.com (using EX data), it is not factored into the "Revolving Utilization" display.

But on Experian.com (the free monthly report+FICO8 from the beta app), it is factored into the "My Overall Credit Usage" display.

On CreditKarma, it is not factored into the "Credit Card Utilization" metric for either the TU or EQ data.

The point here is that the way in which a particular site chooses to interpret and display a HELOC account has no impact what-so-ever on the actual score calculation. Everything beyond the score itself and and listed Reason Codes is purely the data interpretation of the coders of that particular front-end display. It does not reflect the scoring at all.

Re: OUCH! HELOC included in UTIL calculation.

Revelate — Sun, 12 Jun 2016 05:54:59 GMT

@iv wrote:
@Anonymous wrote:
New HELOC TL from DCU reported today on EX and caused my UTIL to go from 7% to 31%. I drew 45K out of 95k for a home remodeling job. Read somewhere that if TL > 50k then wouldnt be included in UTIL - which turned out to be false in my case.

Under account type - it said real estate loan and term - it said revolving.

Good thing is that FICO 8 score only dropped 4 pts!

I will update in 9 days when I will pull EQ and TU and report back on how the other 2 Treat HELOC..
How HELOCs are displayed in any particular reporting/monitoring product and how they factor into FICO scores are not the same...

I have a large HELOC ($200k, 97% util), and it is not factored into FICO (or Vantage) scoring as revolving utilization.

But how various reporting interfaces choose to display the data varies...

Here on MyFICO, it shows the HELOC as a mortgage loan on TU, and as a revolving account on EQ and EX - but it doesn't factor the HELOC into the "Ratio of Your Revolving Balances...) infobox on any of the three.

On Discover's creditscorecard.com (using EX data), it is not factored into the "Revolving Utilization" display.

But on Experian.com (the free monthly report+FICO8 from the beta app), it is factored into the "My Overall Credit Usage" display.

On CreditKarma, it is not factored into the "Credit Card Utilization" metric for either the TU or EQ data.

The point here is that the way in which a particular site chooses to interpret and display a HELOC account has no impact what-so-ever on the actual score calculation. Everything beyond the score itself and and listed Reason Codes is purely the data interpretation of the coders of that particular front-end display. It does not reflect the scoring at all.

To add to that excellent summary, 4 points could've been AAOA or number of accounts with balances too. Need more data heh, I'll be playing with my baby HELOC (29K) which will probably get to some level high enough to trigger a meaningful change on individual revolving utilization, but single account maxxed barely makes much difference on my file so might not get much out of it.