@visorboy1974 wrote:
@n777ua wrote:
Can anyone explain the fundamental difference between a CC and LOC? AFAIK, a LOC is just like a CC, you get a credit limit, and you can borrow up to that much. I've been told, however ( and I don't know how true this is) that if you borrow 100% of your available LOC, b/c it shows differently on a credit report it won't pull your FICO down? Is that true ?
I think it depends if the LOC is coded as a revolving line or installment loan.
Ditto. FICO views it as a revolving TL based on the way it is coded and the limit of the LOC. In other words, if you have a LOC of $50k, it is highly likely that FICO will score it as a mortgage TL as opposed to a revolving because of the limit and maxing it really wouldn't hurt. If the CL were lower, let's say $5000, then FICO would see it as a revolving and maxing it would hurt your FICO. That threshold veries by CRA and FICO version used. Generally, that limit threshold is around $20k. I'll defer to others on the detail. I have a LOC for $5000 and one for $500 and both are scored as revolving.
Applying for them is just as easy as applying for a CC. Same paperwork. I guess it would be more challenging if it was a HELOC instead.
