converting revolving to installment

Anonymous · ‎12-07-2007

Hello mythbusters...

1: I have read different sources online stating that a HELOC over $40,000 is not considered a revolving account for FICO scoring purposes, but is scored as an installment 2nd lien mortgage. Is this correct? I have a $110,000 HELOC (maxed) that, according to online analyses, would add considerably to my score if converted to a fixed rate 2nd mortgage. I could certainly use that considerable plus to the score, the higher monthly payments notwithstanding. A moot move I would guess, if it is already considered an installment, but if it is in fact scored like a revolving, it is eating up a LOT of balance to limit ratio.

2: One such analysis also gave me a good 13 point boost if I raised the limit on an installment loan I already have, and paid off all my high (80%) balance credit cards.

Some clarity?
Well appreciated.

ozgirl · ‎12-08-2007

Similar situation for me--except, the HELOC is reported as installment on my report and as revolving on my husbands. I would like to get this "fixed" but don't know how. Perhaps a call to the lender? Will try!

Anonymous · ‎12-08-2007

HELOCs are one of the most inconsistently reported items on the CRs. Mine reports as revolving on one CR and installment on the other two. They all use different language in the description of the account. The one that reports it as revolving is actually my highest score (801). The other two CRs show me at 1% utilization and the third shows 53%.I did dispute and got a verified form letter back. The lender says it only reports one account and it is the different CRAs that interpret it differently. In this process the interest rates got attractive enough that I sourced a new mortgage. I applied last Monday and close this Monday. Since it was a straigt refi with no cash being taken out, the app to close was pretty quick. I did the refi because of the interest rate and not for credit, but it will fix the inconsistency with my reports.

Message Edited by prowen on 12-08-2007 11:48 AM

Anonymous · ‎12-08-2007

I would agree that the 110K HELOC is NOT being calculated in UTL.

In General HEL's have a higher APR than HELOC's
I would only make a change if it benefits you FINANCIALY-
Lower APR, paying less interest over the term.

I don't think you would gain anything score wise unless you were able to lower the balance or balance to limit.

Now paying down UTL on Revolving credit cards is a whole different story-

Anonymous · ‎12-08-2007

If you odd ball report is TU - I would not sweat it a bit. The older version of the TU scoring formula on myFICO is the older one.

@Anonymous wrote:
HELOCs are one of the most inconsistently reported items on the CRs. Mine reports as revolving on one CR and installment on the other two. They all use different language in the description of the account. The one that reports it as revolving is actually my highest score (801). The other two CRs show me at 1% utilization and the third shows 53%.I did dispute and got a verified form letter back. The lender says it only reports one account and it is the different CRAs that interpret it differently. In this process the interest rates got attractive enough that I sourced a new mortgage. I applied last Monday and close this Monday. Since it was a straigt refi with no cash being taken out, the app to close was pretty quick. I did the refi because of the interest rate and not for credit, but it will fix the inconsistency with my reports.

Message Edited by prowen on 12-08-2007 11:48 AM

Anonymous · ‎12-08-2007

Timothy wrote: If you odd ball report is TU - I would not sweat it a bit. The older version of the TU scoring formula on myFICO is the older one.

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This is a case where it is Experian that is counting it that way. $320K+ revolving CL with $160K+ balance. The Heloc has a $160K+ CL and is near max. This is using their numbers. I still don't believe an 800 is possible with that kind of utilization and it is MY credit report. That is the way it has been for some months. Just one of those oddities that gets you a bit nuts when you think about it. Just when I think I am beginning to get a handle on it...

Message Edited by prowen on 12-08-2007 12:27 PM

Anonymous · ‎12-08-2007

MyFICO's EX reports show it in the dollar amount in revolving-
I assure you is in not being calculated in revolving UTL.

When me HELOC reported my EX SCORE MOVED EXACTLY ZERO POINTS.

@Anonymous wrote:
Timothy wrote: If you odd ball report is TU - I would not sweat it a bit. The older version of the TU scoring formula on myFICO is the older one.
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This is a case where it is Experian that is counting it that way. $320K+ revolving CL with $160K+ balance. The Heloc has a $160K+ CL and is near max. This is using their numbers. I still don't believe an 800 is possible with that kind of utilization and it is MY credit report. That is the way it has been for some months. Just one of those oddities that gets you a bit nuts when you think about it. Just when I think I am beginning to get a handle on it...

Message Edited by prowen on 12-08-2007 12:27 PM

Anonymous · ‎12-08-2007

prowin, would that Experian number be your Experian "Vantage" score? For some reason Ex changed their metrics and now use a scale of 501-990, as opposed to the traditional 300-850, and so scores seem higher. Racking my idiot brain trying to reason out such a move.

Anonymous · ‎12-08-2007

marconi wrote:

prowin, would that Experian number be your Experian "Vantage" score? For some reason Ex changed their metrics and now use a scale of 501-990, as opposed to the traditional 300-850, and so scores seem higher. Racking my idiot brain trying to reason out such a move.

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No. The score is My Fico and the info came from that report, but the detail and utilization came from the Experian report I pulled from their web site. The My Fico report says:

Because your FICO® score is exceptionally high, there are no actionable negative factors present with your score. Continue to manage your credit as you currently are doing to maintain your very high FICO® score.

There are no negative reasons significantly affecting your FICO® Score.

Timothy is right in terms of it can not be calculating that way in spite of what it says. Util is counting 10-15 points against each 10% of util reached (I used the estimating model to come up with this). I would expect a 50-75 point drop if it were counting any other way. I use My Fico for a baseline, but it does not offer many observations on Exp. As My Fico states:

This page normally lists the information that is on your credit report that is helping your FICO® score. Experian does not supply us with information for this section but credit reports from Equifax or TransUnion do. So please make sure you check this page with your FICO® score and credit report from Equifax or TransUnion to see what you are doing right with your credit.

As I said, the Exp web site is the one saying what my Util is, not My Fico. As Timothy indicated, it does say it is revolving, but it is not calculating that way. The whole point I was making orginally was the inconsistency (at least to me) in how the HELOC is being treated.

Anonymous · ‎12-08-2007

This was the estimater I used that was posted in another thread:

dnm45227
Super Contributor
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Registered: 08-27-2007

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foud this fico score estimator and it seem pretty close. also gives you a indication as the what fico specifically looks at by the questions it asks.

http://www.myfico.com/FICOCreditScoreEstimator/Default.aspx

it's in the ball park for me, on the low end anyway.

aka "ducky" as of 11/18/07