Revolving vs Installment

[rubaty]

I understand how much revolving debt counts against your score but how do they factor installment accts?

[haulingthescoreup]

It helps your score to have installment credit, but it doesn't factor into util, etc. It's a lot more stable. I paid off a very small student loan, leaving a mortgage and second student loan open, and two scores stayed the same, and one dropped a point. I also have a closed/ paid car lease and personal loan.

Consumer finance loans seem to hurt your score, although I'm still trying to find out for sure where it says this, and how you know what counts as one.

Here's the link to the breakdown and explanation. You can get to it by clicking on the myFICO Credit Education tab, and then clicking on the pie chart:

http://www.myfico.com/CreditEducation/WhatsInYourScore.aspx

[jackg]

OK, I'll bite, how much does revolving debt count against my score (FICO?) ?

[haulingthescoreup]

First of all, I should have said that non-mortgage installment util is looked at, but it's a separate category from revolving util, and not nearly as significant.

The effect of your revolving util varies, depending on what baddies you have. As a start, click on the Credit Education tab at the top of this page, and then click on the pie chart. Amounts owed is 30% of your score, meaning 30% x 850 points = 255 potential points from this category. This includes all kinds of credit, not just revolving, but I know that when I paid off a student loan, 2 scores didn't change, and 1 score dropped 1 point.

edit: I crunched the numbers wrong --please see below for where berraco58 rescued me!

You'll read over and over here that there are big point changes when people reduce their revolving util, depending on what else they have going on. I think I had a 40 point jump when I went from around 60% overall with one card at 90%+ to under 10%. And that is in the context of my lates, which are the anchors on my scores.

Message Edited by haulingthescoreup on 12-08-2007 12:55 PM

[Anonymous]

Hauling...if I'm reading you right, I can take my high balance revolving (CCs) plus my consumer credit (citi), and transfer all into my HELOC (with the limit raised to accomodate), and my fico would benefit.

That brings up the other question on which I can't seem to get a straight answer...is a $110k HELOC scored as a mortage or revolving? If revolving, as lower HELOCs are scored, would it be beneficial, fico-wise, to convert it to a loan, rather than line?

[Anonymous]

Alright so I read your post Hauling about 20 some odd days ago and I meant to say this then but I forgot. I'm a little confused as to the basis of this statement.

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Amounts owed is 30% of your score, meaning 30% x 850 points = 255 potential points from this category.

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Now from my understanding, the FICO score is on a 300 to 850 range. So the applicable range of points (850 - 300) is a 550 point range not an 850 point range. So if 30% of your score is Amount Owed then that would be 30% x 550 points = 165 potential points from this category. Right?

[haulingthescoreup]

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@Anonymous wrote:

Alright so I read your post Hauling about 20 some odd days ago and I meant to say this then but I forgot. I'm a little confused as to the basis of this statement.

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Amounts owed is 30% of your score, meaning 30% x 850 points = 255 potential points from this category.

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Now from my understanding, the FICO score is on a 300 to 850 range. So the applicable range of points (850 - 300) is a 550 point range not an 850 point range. So if 30% of your score is Amount Owed then that would be 30% x 550 points = 165 potential points from this category. Right?

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Absolutely correct! I flinched when I just now re-read this, and I was getting ready to go back and edit. Thanks for saving me the typing!

[haulingthescoreup]

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@Anonymous wrote:

Hauling...if I'm reading you right, I can take my high balance revolving (CCs) plus my consumer credit (citi), and transfer all into my HELOC (with the limit raised to accomodate), and my fico would benefit.

That brings up the other question on which I can't seem to get a straight answer...is a $110k HELOC scored as a mortage or revolving? If revolving, as lower HELOCs are scored, would it be beneficial, fico-wise, to convert it to a loan, rather than line?

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Despite what it says on the FICO score reports, HELOC's are now supposed to report separately from revolving. Those with high balances on their HELOC's have reported this to be true. The question is whether this only applies to balances over $40-50K or so, or all HELOCs.

It's really confusing, because when you look at the various screens on the FICO score reports, these things sometimes seem to be included with revolving, and sometimes not. The TU sim includes the HELOC balance with revolving balance, which really goobers up the what-if'ing. And all the reports, FICO and other, call them different things --revolving, mortgage, other, you name it.

At the end of this month, my $50K HELOC will report with a $12K balance, 24% util. We'll see what, if anything, happens to my scores! I'm keeping every other element as stable as possible, so that any change should be due only to the HELOC.

[LuvsRetro]

DH just paid off his HELOC of $60,000 -  Nov 10, 2007.    So far, haven't seen any point change. 

[fused]

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teamfico wrote:

DH just paid off his HELOC of $60,000 -  Nov 10, 2007.    So far, haven't seen any point change. 

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A HELOC of this size will ordinarily report as an installment loan or home equity loan and not factor in revolving util% calculations. TU may or may not treat it the same way. In any event, this will help you even if you have a high balance reporting on it.