Is an "open line of credit" loan bad for credit rating?

[Anonymous]

Is an "open line of credit" (aka second mortgage) loan bad for ones credit rating?

I was recently told this by a lender. He said closing the account (our open line of credit) will increase our credit FICO score).

Is this true?

Thanks

Lee

[Anonymous]

I don't agree with that.  What he is probably worried about is you having too much avail credit and if you max it out you wouldn't be able to repay it.   have nevr seen a HELOC as detrimenta nor have I ever heard of closig an account doing a FICO score any good at all even if its closed because yo paid it off.

[Anonymous]

Hi Brammy:

Thanks for the input. Do you think it might actually hurt us if we close (pay-off) the second mortgage (line of credit) as we were going to obtain a new mortgage and just have one payment for both loans aka; pay off that second.

thanks

Lee

[Anonymous]

With the rate on your equity line and your LTV, close your second. If there is any affect on your credit, it would be very minimal.

[Anonymous]

Thanks Boheme. That seems to be the best thing to do for our financial health right now.

Lee

Message Edited by Lee_6063 on 04-17-2007 10:53 AM