topic Utilization on Line of Credit in Understanding FICO® Scoring

Utilization on Line of Credit

shelle82m — Mon, 27 Aug 2007 14:21:26 GMT

I've been looking around the board for topics on this, but can't seem to find any. I recently received a line of credit with Bank of America to consolidate my credit cards and it is being reported a revolving account. I read that utilization is calculated differently on a line of credit. Is is really bad for your score to be "maxed out" on a line of credit? I know it is on a credit card, and I was wondering if if was the same on for lines of credit. Thanks in advance!

Re: Utilization on Line of Credit

Anonymous — Mon, 27 Aug 2007 14:54:44 GMT

Line of Credit from my understanding - counts 100% in Utilization.

Ideally- if you paid off all of your cards with this- you should have doubled your CL and moved the balance to 1 account. This would immediately reduce your utilization by at least 50%.

A HELOC- that is backed by real property should be reported in mortgages.

Just keep paying on it-
The overall UTL counts more than individual UTL.

Re: Utilization on Line of Credit

Kat — Mon, 27 Aug 2007 15:37:50 GMT

I have overdraft protection on 2 checking acounts (total cl $6500). These are listed as LOC on all 3 CRs and are included in my total utilization.

Re: Utilization on Line of Credit

shelle82m — Tue, 28 Aug 2007 13:29:22 GMT

Thank you for the replies! My overall utilization dropped from 76% to 39% (although right now my LOC is listing a $0 balance & my credit cards still have their balances listed). I was just wondering if when my balance on the LOC is reported it is going to be at about 94% utilization for that particular account. I know on credit cards, that means maxed out and can hurt your score, and I wasn't sure if that was the case on LOC's.

Re: Utilization on Line of Credit

Anonymous — Fri, 07 Sep 2007 16:52:21 GMT

Timothy wrote:
Line of Credit from my understanding - counts 100% in Utilization.

Ideally- if you paid off all of your cards with this- you should have doubled your CL and moved the balance to 1 account. This would immediately reduce your utilization by at least 50%.

A HELOC- that is backed by real property should be reported in mortgages.

Just keep paying on it-
The overall UTL counts more than individual UTL.

Timothy

I'm not sure I'm clear, by saying "counts 100% in Util" do you mean the total avail credit in the LOC is incl in your Total avail credit math, and the Balance on your LOC is included in your Tot Bal Due?

Just like a CC, right? So a LOC will only affect your score adversely if you have high utilization on it, Right?? I was just getting ready to take out a large LOC at my CU and don't want to shoot myself in the foot.

thanks

ctrob

Re: Utilization on Line of Credit

fused — Fri, 07 Sep 2007 16:55:01 GMT

ctrob wrote:

Timothy wrote:
Line of Credit from my understanding - counts 100% in Utilization.

Ideally- if you paid off all of your cards with this- you should have doubled your CL and moved the balance to 1 account. This would immediately reduce your utilization by at least 50%.

A HELOC- that is backed by real property should be reported in mortgages.

Just keep paying on it-
The overall UTL counts more than individual UTL.

Timothy

I'm not sure I'm clear, by saying "counts 100% in Util" do you mean the total avail credit in the LOC is incl in your Total avail credit math, and the Balance on your LOC is included in your Tot Bal Due?

Just like a CC, right? So a LOC will only affect your score adversely if you have high utilization on it, Right?? I was just getting ready to take out a large LOC at my CU and don't want to shoot myself in the foot.

thanks

ctrob

If the line of credit is reporting as a revolving TL then yes it's factored and scored the same way as CCs.

Re: Utilization on Line of Credit

Anonymous — Sat, 08 Sep 2007 03:08:06 GMT

Thanks Fused...