Does FICO count property owned if no mortgage - just free and clear

[Anonymous]

Husband and I have a bit less than 40K CC debt, paying it off at over 1K / month.  Car loan for 6K.  We own house, garage, and Northern MN land we live on (120 acres) but no mortgage.  Any way to have that counted by FICO?  Now that even car insurance looks at FICO the CC debt is problem.

[smallfry]

Nope. Sadly once your mortgage falls of your reports you get no credit for it at all from the scoring gods. That's the way it is.

[Anonymous]

Merline ... you totally need to get a home equity loan to pay off your CCs.  Then your FICO shoots up and the interest that you are paying will go down substantiallyl.

[Anonymous]

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@Anonymous wrote:
Merline ... you totally need to get a home equity loan to pay off your CCs.  Then your FICO shoots up and the interest that you are paying will go down substantiallyl.

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Uh, I thought it was a bad idea to use secured debt (house) to pay unsecured debt (CCs).  If something happens and you can't pay anything, when it's just on cards you might claim bankruptcy etc but you'd still own your home.  If something happens (job loss, serious illness, etc) and you now have all that debt against the house, you could lose your home when you can't pay.

There might be a balance to strike here with a small loan, but $40k is a lot to risk on a paid off home.

[MattH]

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@Anonymous wrote:

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@Anonymous wrote:
Merline ... you totally need to get a home equity loan to pay off your CCs.  Then your FICO shoots up and the interest that you are paying will go down substantiallyl.

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Uh, I thought it was a bad idea to use secured debt (house) to pay unsecured debt (CCs).  If something happens and you can't pay anything, when it's just on cards you might claim bankruptcy etc but you'd still own your home.  If something happens (job loss, serious illness, etc) and you now have all that debt against the house, you could lose your home when you can't pay.

There might be a balance to strike here with a small loan, but $40k is a lot to risk on a paid off home.

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Indeed.  Many States have laws that make it much harder for creditors to go after a residence for non-mortgage debt, for instance it is sometimes possible to keep an house through a bankruptcy if none of the debt is mortgage debt.  So converting non-mortgage debt into mortgage debt can, as DieselAmy says, result in losing the house.  Bad idea.

HOWEVER, original poster needs to start some very serious thinking about budgeting issues, that is a LOT of credit card debt.  One way or another that debt needs to get paid, and unless OP gets a major windfall there are basically two ways that debt can get paid: income increasing and/or spending decreasing.  Moving debt around does not solve the underlying budgetary imbalance, as our whole country seems to be learning the hard way at present.

[Anonymous]

good morning merline..my first time on this site, and i'm in the twin cities...bitter cold this morning, how are you?

[Anonymous]

good morning...twincities here...nice and cold, eh?  home equity is a great idead, low interest rates, can consolidate and payoff quickly.

[haulingthescoreup]

Home equity can work very well, IF you are incredibly self-disciplined and there is no way that the debt is going to come back.

For instance some people incur high CC debt due to a one-time financial/ medical disaster.

But if cards have been used steadily and uncontrollably, complete with promises to oneself not to use them any more, but then out they come again, using home equity is a really bad idea.

Someone in this situation has to be brutally honest with themselves as to the cause of all this debt. Then the decision can be made as to the best way to start dealing with it.