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Affect of Line of Credit on score

LazarusLong
Contributor

Affect of Line of Credit on score

We've got a "Hogan" Line of Credit through US Bank that is tied to our checking account as an overdraft protection account.  It has a pretty high limit ($5500) and we've had it for over 20 years now.  Our utilization has always been pretty high on it (over 90%), and wondering how the credit scoring models take it into account?  When going through the simulations for credit score changes, it only ever references credit cards, not the LOC.  Also the reports never really mention that account as affecting score due to utilization?

 

We have an opportunity to pay it down now but also have one more store CC that is over 90% utilization so wondering if that would be the better one to pay down?

AAoA = 6.8 yrs
AoOA = 22.6 yrs
Message 1 of 14
13 REPLIES 13
thornback
Senior Contributor

Re: Affect of Line of Credit on score

It depends on whether its reporting as a revolving account or installment.  

 

My checking line of credit reports as revolving on EX and EQ but as an installment in TU. Any balance is factored into revolving util and may affect my scores for EX and EQ, while TU remains unaffected regardless of balance.  (I have no idea why the same account is categorized differently on my reports-- and I honesty never bothered to look into it since it has a $0 balance most of the time). 

 

On my reports, TU actually lists it under installment loans and EX and EQ list it under revolvers so you should be able to determine how yours is categorized pretty easily upon viewing your full reports  

 

If it is revolving, then reducing the utilization would be helpful.  If it is an installment, reducing the util isn't priority. 

 

Welcome to the forums!

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 2 of 14
LazarusLong
Contributor

Re: Affect of Line of Credit on score

On Experian it reports as revolving - on TU and EQ it doesn't indicate the type (at least according to the reports showing on Experian's website).

AAoA = 6.8 yrs
AoOA = 22.6 yrs
Message 3 of 14
thornback
Senior Contributor

Re: Affect of Line of Credit on score

Pull your full reports from annualcreditreport.com  -- it's free to pull and they are much more comprehensive and detailed. 

Personal Aphorism:
"Forget What You Feel, Remember What You Deserve"


Starting FICO 8s | 09/2017: EX 641 ✦ EQ 634 ✦ TU 647
Current FICO 8s | 11/2020: EX 780 ✦ EQ 771 ✦ TU 781
Current FICO 9s | 11/2020: EX 793 ✦ EQ 780 ✦ TU 778
2020 Goal Score | 800s


My AAoA: 3.8 years not incl. AU / 4 years incl. AU
My AoOA: 7.10 years not incl. AU / 9.10 years incl. AU
Inquiries: EX 0/6 | 1/12 ✦ EQ 1/6 | 2/12 ✦ TU 0/6 | 1/12
Report Status: Clean


Without patience, we will learn less in life. We will see less. We will feel less. We will hear less. Ironically, rush and more usually mean less.
Message 4 of 14
SouthJamaica
Super Contributor

Re: Affect of Line of Credit on score


@LazarusLong wrote:

We've got a "Hogan" Line of Credit through US Bank that is tied to our checking account as an overdraft protection account.  It has a pretty high limit ($5500) and we've had it for over 20 years now.  Our utilization has always been pretty high on it (over 90%), and wondering how the credit scoring models take it into account?  When going through the simulations for credit score changes, it only ever references credit cards, not the LOC.  Also the reports never really mention that account as affecting score due to utilization?

 

We have an opportunity to pay it down now but also have one more store CC that is over 90% utilization so wondering if that would be the better one to pay down?


I don't know what a "Hogan" is, but if it's a personal line of credit (a) it reports as a revolver, and (b)  you're absolutely killing your scores with that 90% number. If I were you I wouldn't let it report at greater than 28%.

Message 5 of 14
Overmedicated
Community Leader
Valued Contributor

Re: Affect of Line of Credit on score

I'm not sure what the "Hogan" is either but my LOC from US Bank reports as revolving.

 FICO 8
Message 6 of 14
LazarusLong
Contributor

Re: Affect of Line of Credit on score

I don't know what "Hogan" means myself either - I though maybe it was some specific type of credit or something but maybe its just an internal name for the LOC at US Bank.  We've had it such a long time I don't honestly know.

 

So we have a retail card at over 90% util (Nordstrom, $1500), and the LOC at over 90% util ($5500).  Can't really do both at the same time so thinking of paying off Nordstrom than hack away at the LOC?  That would be all we have left for revolving.  We will have 17120 in total credit lines (across 8 credit cards, 4 retail and 1 LOC), with only the LOC having a balance.  Total utilization percentage will be around 30% (and falling).

 

Also will be working on trying to increase the credit lines on the cards that we can.

AAoA = 6.8 yrs
AoOA = 22.6 yrs
Message 7 of 14
ImTheDevil
Community Leader
Senior Contributor

Re: Affect of Line of Credit on score

That's the right approach. Do that and you should see some nice improvement.



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TCL $112,400 | Agg. Util under 10%
Message 8 of 14
SouthJamaica
Super Contributor

Re: Affect of Line of Credit on score


@LazarusLong wrote:

I don't know what "Hogan" means myself either - I though maybe it was some specific type of credit or something but maybe its just an internal name for the LOC at US Bank.  We've had it such a long time I don't honestly know.

 

So we have a retail card at over 90% util (Nordstrom, $1500), and the LOC at over 90% util ($5500).  Can't really do both at the same time so thinking of paying off Nordstrom than hack away at the LOC?  That would be all we have left for revolving.  We will have 17120 in total credit lines (across 8 credit cards, 4 retail and 1 LOC), with only the LOC having a balance.  Total utilization percentage will be around 30% (and falling).

 

Also will be working on trying to increase the credit lines on the cards that we can.


Yes get Nordstrom down to 28%, then work on getting the PLOC down to 28%.

Message 9 of 14
LazarusLong
Contributor

Re: Affect of Line of Credit on score

 


@SouthJamaica wrote:

@LazarusLong wrote:

I don't know what "Hogan" means myself either - I though maybe it was some specific type of credit or something but maybe its just an internal name for the LOC at US Bank.  We've had it such a long time I don't honestly know.

 

So we have a retail card at over 90% util (Nordstrom, $1500), and the LOC at over 90% util ($5500).  Can't really do both at the same time so thinking of paying off Nordstrom than hack away at the LOC?  That would be all we have left for revolving.  We will have 17120 in total credit lines (across 8 credit cards, 4 retail and 1 LOC), with only the LOC having a balance.  Total utilization percentage will be around 30% (and falling).

 

Also will be working on trying to increase the credit lines on the cards that we can.


Yes get Nordstrom down to 28%, then work on getting the PLOC down to 28%.


So we have the funds to payoff the Nordstrom card completely. Would it be better to just get it to 28% and use the extra funds to tackle the LOC?  We aren't going to be using it much as my wife used to work at Nordstrom and no longer does lol. 

AAoA = 6.8 yrs
AoOA = 22.6 yrs
Message 10 of 14
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