High Heloc utilization problem

[kdot]

Yesterday, I cold app'ed for the Chase FU and was instantly denied. My FICO (according to my Citi Simplicity and Disco free credit scores) are >760 and I'm way below the 5/24.  My DTI is good. I called recon line.

The issue seems to be my credit utilization.  I'm at 20-25% on all my CCs with no lates, no derogatories, no BKs. The only thing it could be are my HELOCS. I have an old one (way beyond the initial draw period) and another that is recently maxed out (due to Covid impact) with a draw period ending in 5/21 (the utilization on this HELOC has been 80-85% for 3-4 yrs prior to now).  The recon line told me that my cred ut is 80%!!!

I know Chase can be tough.  This April, I got a Discover it card and an Amex Blue Business card.  At that time, 90% of my open HELOC had been used.  The only thing that's changed since then is that I used the last 10% of my remaining HELOC in June to deal with the Covid closures. But my credit score has stayed in the mid 700s all this time.

This Chase denial has spooked me.  Plus CK and Nav (both Vantage scores) haven't offered any CCs matches in months...they recommend that I get credit builder cards like Credit One...with my 760+ credit score!

My goal is to get more personal and business CCs, as I'm building a small business (a result of Covid impact). My CS is strong but my HELOC-loaded utilization is creating challenges.  Fast-tracking the pay down on the HELOCS isn't possible as they are on 20-yr terms and are larger amounts (often the case with HELICS vs CCs).  Right now, refi-ing my primary mortgage to clear out the HELOCS isn't really an option as I'm transitioning to self-employed.  

I'm looking for advice re: CCs that will actually differentiate between my real-estate secured HELOC usage and traditional high-interest-rate unsecured CC utilization.  My only other CCs are older accounts: cap one, Citi Simplicity, Care Credit, Kohl's, and Amazon...(total CLI is 50k with a total utilization of about 12k).  Also, is personal credit utilization considered when app' ing for bus CCs if personal CS is good?

I don't want to waste anymore hard pulls if my chances a slim...

Although HELOCS may be revolving debt..they are decidedly different than CCs...How can I get my HELOCS to be unincluded in my debt-to-credit ratio?? Especially as the draw periods close...

[K-in-Boston]

I am not sure if it's known which lenders use HELOCs in their internal scoring, but for FICO scoring they are definitely excluded from revolving utilization in the scoring algorithms (at least large ones are).

But personal utilization will definitely be considered anytime a personal guarantee is used to open a business card. 

[kdot]

Thank you.  So with utilization contributing +-30% of a FICO credit score...even with the heavy usage of the HELOCS, it is possible to still have a decent credit score (mid-700s). That maybe my situation.  

But why would a CC company disregard a strong overall credit score and focus only on the utilization?  Is this specific to Chase and the Vantage Scoring model (CK, Nav)...?  It's quite puzzling!!!

[Anonymous]

Supposedly they're excluded in 8, but count in the old scores, iirc.

[Anonymous]

Often the reasons provided for denial aren't actually the reason(s) you were denied.

If I were to guess, balances (even modest ones) on many cards, somewhat aggressive credit seeking behavior, and also tightened lending guidelines could be at play here . . . . 

It also seems like you don't have scores from every bureau here . . . sure there's not a derogatory mark or issue on one of them?

[DaveInAZ]

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@K-in-Boston wrote:

I am not sure if it's known which lenders use HELOCs in their internal scoring, but for FICO scoring they are definitely excluded from revolving utilization in the scoring algorithms (at least large ones are).

But personal utilization will definitely be considered anytime a personal guarantee is used to open a business card. 

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Ah, that explains it! Last month I took my HELOC from around 30% to 74%, I needed a short term cash infusion for bank account bonus chasing. My FICO8/9 scores didn't budge, but of course CK Vantage 3 score took a view that the sky was falling and scores tanked 19 points. But who cares?

And I specifically kept my HELOC util under the 75% 'Very Poor' level, looks I can take it higher next time if needed. 3.75% is a pretty nice rate, and I already got a $500 bonus for putting $15k in a savings account, just need to keep it there until Nov. 19, and that bonus sure beats my .60% savings rate at Amex & Marcus.

And I'm not looking for any new credit.

[K-in-Boston]

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@kdot wrote:

Thank you.  So with utilization contributing +-30% of a FICO credit score...even with the heavy usage of the HELOCS, it is possible to still have a decent credit score (mid-700s). That maybe my situation.  

But why would a CC company disregard a strong overall credit score and focus only on the utilization?  Is this specific to Chase and the Vantage Scoring model (CK, Nav)...?  It's quite puzzling!!!

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Yes.  I had 830s across the board on FICO 8 last year with a HELOC at 100% utilization. Again, my guess is this may be Chase's internal score and not a FICO or Vantage thing.

[RSX]

if it isnt the HELOC, couldnt it be this?

 I'm at 20-25% on all my CCs

Just because all the scoring models say under 30% is good, doesnt mean it shouldnt be even lower if possible

maybe get a couple of those under 9% and their answer might be different

[K-in-Boston]

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@RSX wrote:

if it isnt the HELOC, couldnt it be this?

 I'm at 20-25% on all my CCs

Just because all the scoring models say under 30% is good, doesnt mean it shouldnt be even lower if possible

maybe get a couple of those under 9% and their answer might be different

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Recon stated OP's utilization was at 80%, so their measurements are counting HELOC balances.