Equity Line - help

[Anonymous]

My Equifax Fico is currently at 627.  The lowest I've ever been.  I was unemployed for one year.  During that year (june 05-June-06) I opened up an Equity Line in the amount of $50,000.  I believe that's when my credit dropped.  I was late with my mortgage once in December 2005.   Because equity lines are treated as revolving credit my utilization is very very high.  The equity line is interest only and because my new job meant a $700.00 reduction in net pay I can't currently send anymore than only the interest.  (Besides I pay $1,076.00 in credit card payments which include the equity line and a %221.00 student loan that I rolled into a credit card with a 3.9%). 

I would like to have a success story, just as many as I have read, but don't know how.  All my credit cards are listed as "never late, paid as agreed"  I can't refinance to roll in the equity line for two reasons:  One the real estate market has gone down the tubes, and:  Two my credit scores are not scores lenders are looking for.  Besides, my debt to income ratio is very high.  My new job does not pay the same as my previous one.  So right now I wouldn't qualify for my existing loan.  Is there anything I can do or am I in a situation where my only option is wait for 2-3 years to see my scores go up?

Would appreciate any response.

[Anonymous]

Hi. Can't offer advice on that but you might get more help by posting in the

Mortgage, Auto, and other Installment Loans   forum.

GL

[Anonymous]

Hi Trying, sorry to hear of the problems of reduced paycheck.

As your utilizations are so high, I can only suggest stop using the cc's altogether, while continuing to make payments on them. Cold turkey. Pay as much every month as comfortably possible. Decreasing utils is a sure fire way to increase the scores.

As your DTI is so high, you must get that down, however possible.

I'm sure others will chime in shortly and offer their opinions. Good luck to you.

[Anonymous]

Hello Sylvia Tob and Anderson, thank you so much for your responses.  Yes, what I plan to do is get my utilization down.  I already completed my spreadsheet, just as someone else had suggested, which shows my utilization.  Yikes.  I only have two cards under 10%.  Working on it.  Thanks

[Anonymous]

I my own personal experience - a HELOC w/ a 50K limit- is not factored into revolving utilization.

Not only this- when my reported it did ZERO point change on all 3 CRA's.

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@Anonymous wrote:

Hello Sylvia Tob and Anderson, thank you so much for your responses. Yes, what I plan to do is get my utilization down. I already completed my spreadsheet, just as someone else had suggested, which shows my utilization. Yikes. I only have two cards under 10%. Working on it. Thanks

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[ozgirl]

I just discovered that our Home Equity loan is reported as revolving on one of my husbands Credit reports--not true on my credit reports...why would this be? How do you get it "fixed". This makes a HUGE difference in utilization!!!

[haulingthescoreup]

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@ozgirl wrote:
I just discovered that our Home Equity loan is reported as revolving on one of my husbands Credit reports--not true on my credit reports...why would this be? How do you get it "fixed". This makes a HUGE difference in utilization!!!

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These get named differently on every credit report, but what counts is how it is actually treated for scoring. If you can figure out your revolving util with and without the HELOC, and compare those figures with the util showing on screen 2 of your EQ and TU FICO reports, that should tell you whether it's being factored in.

EX lists mine in the revolving total on the credit-at-a-glance screen, but since they don't list my util on screen 2, I have to guess at how they're using it. I don't * think * that they're counting it as revolving when it scores. It's not supposed to, if it's a good-sized loan (mine is for up to $50K.)

[Anonymous]

Thank you Timothy.  For a long time I have been told it does get included in my revolving.  Earlier this year I tried to re-fi to get rid of that HELOC and the person at the bank told me that's what they were including in my revolving.  The bottom line is I need to reduce my utilization.  Thanks. 

[haulingthescoreup]

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@Anonymous wrote:

Thank you Timothy. For a long time I have been told it does get included in my revolving. Earlier this year I tried to re-fi to get rid of that HELOC and the person at the bank told me that's what they were including in my revolving. The bottom line is I need to reduce my utilization. Thanks.

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I think that this is a fairly recent change, after uproar from consumers. And probably from the home loan industry, once people heard what it might do to their scores.