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Credit Card VS Unsecured LOC

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Credit Card VS Unsecured LOC

Which is worse when reporting maxed out?  Does this sound like a stupid question?  I feel the credit card being maxed out would have more negative impact on your score. Am I wrong and are the equal in FICO's eyes?

5/17/19 TU 771 EX 786 EQ 767 ---- Discover $35,000/BOA $25,000/Macy's $25,000/AmEx Delta Plat $18,500/Lowe's $15,000/Sam's Club MC $15,000/Wells Fargo PLOC $15,000/BOA Cash Rewards $13,800/Apple Rewards $12,100/GM BuyPower $11,000/AmEx Hilton Honors $10,000/Sam's Club Credit $10,000/Dick's MasterCard $10,000/Citi Simplicity $8200/Citi Double Cash $7900/Wells Fargo Visa $7000/State Farm $4000
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Moderator Emerita

Re: Credit Card VS Unsecured LOC

An unsecured LOC is revolving credit.

 

AFAiK, it is regarded as identical to a CC. So neither is worse (or better.)

 

 

eta: If one has a higher CL than the other, that one might be worse, because the balance on it would be higher. In other words, $24,999 on a $25K tradeline would be worse than $4,999 on a $5k tradeline.  (tradeline = credit account of whatever type --revolving, installment, mortgage)  I know that Equifax, for instance, looks at total balance owed as well as util, etc etc.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 2 of 11
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Frequent Contributor

Re: Credit Card VS Unsecured LOC

That's kinda what I was thinking. I have a secured LOC for $9000 and may open up a $7000 LOC unsecured.  So may I ask is the secured LOC reporting different as in a more positive way for me then the unsecured will?  I assume it's just like a auto loan since that is secured, also?

 

Just trying to figure this all out. Thanks!

5/17/19 TU 771 EX 786 EQ 767 ---- Discover $35,000/BOA $25,000/Macy's $25,000/AmEx Delta Plat $18,500/Lowe's $15,000/Sam's Club MC $15,000/Wells Fargo PLOC $15,000/BOA Cash Rewards $13,800/Apple Rewards $12,100/GM BuyPower $11,000/AmEx Hilton Honors $10,000/Sam's Club Credit $10,000/Dick's MasterCard $10,000/Citi Simplicity $8200/Citi Double Cash $7900/Wells Fargo Visa $7000/State Farm $4000
Message 3 of 11
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Moderator Emerita

Re: Credit Card VS Unsecured LOC


@junior88 wrote:

That's kinda what I was thinking. I have a secured LOC for $9000 and may open up a $7000 LOC unsecured.  So may I ask is the secured LOC reporting different as in a more positive way for me then the unsecured will?  I assume it's just like a auto loan since that is secured, also?

 

Just trying to figure this all out. Thanks!


You've got me here. I wouldn't be surprised to hear that some report one way, and some the other.

 

Basically, if you have $9K in available credit, and you borrow $1K, and you pay it back, if you then go back to $9K in available credit, it's revolving. But if you had $9K, borrow $1K, repay it, and then still have only $8K available, that would imply that it's installment. Sorta.

 

But I'll betcha that it's really variable. How does it show on your credit reports? --although they can be equally confusing.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
Message 4 of 11
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Frequent Contributor

Re: Credit Card VS Unsecured LOC

The secured LOC reports as revolving BUT my banker said since it was secured that FICO looks at it differently.  My only thought is that its secured, yeah I owe on it but I have a deposit on file to PIF.  Does that make sense?

5/17/19 TU 771 EX 786 EQ 767 ---- Discover $35,000/BOA $25,000/Macy's $25,000/AmEx Delta Plat $18,500/Lowe's $15,000/Sam's Club MC $15,000/Wells Fargo PLOC $15,000/BOA Cash Rewards $13,800/Apple Rewards $12,100/GM BuyPower $11,000/AmEx Hilton Honors $10,000/Sam's Club Credit $10,000/Dick's MasterCard $10,000/Citi Simplicity $8200/Citi Double Cash $7900/Wells Fargo Visa $7000/State Farm $4000
Message 5 of 11
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Valued Contributor

Re: Credit Card VS Unsecured LOC

It is my understanding that bankers tend to look at secured loans differently than unsecured. Most of the bankers that I know personally are not very knowledgeable about FICO scoring.

 

When they report to the CRAs, Lenders catagorize loans into:

 

-  Mortgage

-  Installment

-  Revolving

 

Secured doesn't matter when determining the major catagory.

 

FICO uses those catagories in their calculations and normally use the catagories as reported. The one place you see loans catagorized differently by different CRAs is HELOCs. They may be catagorized as Revolving or Mortgage. This may change according to the amount owed in that a large HELOC is more likely to be catagorized as a Mortgage.

 

 

 

Message 6 of 11
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Senior Contributor

Re: Credit Card VS Unsecured LOC


@GregB wrote:

It is my understanding that bankers tend to look at secured loans differently than unsecured. Most of the bankers that I know personally are not very knowledgeable about FICO scoring.

 

When they report to the CRAs, Lenders catagorize loans into:

 

-  Mortgage

-  Installment

-  Revolving

 

Secured doesn't matter when determining the major catagory.

 

FICO uses those catagories in their calculations and normally use the catagories as reported. The one place you see loans catagorized differently by different CRAs is HELOCs. They may be catagorized as Revolving or Mortgage. This may change according to the amount owed in that a large HELOC is more likely to be catagorized as a Mortgage.

 

 

 



Just curious doo they report auto loans as installments?  I see you only have 3 categories

Message 7 of 11
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Valued Contributor

Re: Credit Card VS Unsecured LOC


@john398 wrote:

@GregB wrote:

It is my understanding that bankers tend to look at secured loans differently than unsecured. Most of the bankers that I know personally are not very knowledgeable about FICO scoring.

 

When they report to the CRAs, Lenders catagorize loans into:

 

-  Mortgage

-  Installment

-  Revolving

 

Secured doesn't matter when determining the major catagory.

 

FICO uses those catagories in their calculations and normally use the catagories as reported. The one place you see loans catagorized differently by different CRAs is HELOCs. They may be catagorized as Revolving or Mortgage. This may change according to the amount owed in that a large HELOC is more likely to be catagorized as a Mortgage.

 

 

 



Just curious doo they report auto loans as installments?  I see you only have 3 categories


Yes...auto loans are definitely in the "installment" category. 

FICO Scores Updated 07/15 EQ08 748 EX08 748 TU08 818
Message 8 of 11
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Senior Contributor

Re: Credit Card VS Unsecured LOC

I didn;t realize that, So do auto loans therefore get points taken off of fico since its installement coded?

 

Message 9 of 11
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Moderator Emerita

Re: Credit Card VS Unsecured LOC


@john398 wrote:

I didn;t realize that, So do auto loans therefore get points taken off of fico since its installement coded?

 


???

 

Nothing wrong with having installment credit. In fact, it helps your credit mix to have an open (I think it has to be open, but I don't know for sure) installment tradeline. Installment includes mortgage for credit mix purposes.

 

Installment credit is figured separately from revolving for util purposes. So all your revolving is added together to determine total revolving util, and installment balances aren't included. Good thing, considering what the typical mortgage and auto loan balance looks like.

* Credit is a wonderful servant, but a terrible master. * Who's the boss --you or your credit?
FICO's: EQ 781 - TU 793 - EX 779 (from PSECU) - Done credit hunting; having fun with credit gardening. - EQ 590 on 5/14/2007
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