HELOC- REVOLVING DEBT

[Anonymous]

I have a HELOC with a balance of $ 79K with total CL of $ 80K.  On the TU FICO report it includes this amount in total revolving debt and of course says my revolving debt is too high( total about $ 94k including HELOC).  But on the credit utilization for revolving debt it only includes my CCs, total of about $ 15K.

Should this be classified as a mortgage and how much is this hurting my score?  Since it is not included in the revolving utiltization is it not hurting too bad?

[haulingthescoreup]

It's a TU98 thing. As I understand it (I could well be wrong on this), TU04 treats it as mortgage. Perhaps one day we'll find out for ourselves.

At any rate, as you said, it's not scored for revolving util, but it is considered as part of your total revolving debt. Mine is the same way. Not a lot you can do about it, other than realize that more and more TU-pullers are using TU04, where (again) I think it doesn't count.

I recently got this on my TU. It's a negative for "High credit usage" with a util of 0%. There were 0 CC's with balances:

[Lel]

Ditto to what HTSU said.  With the TU 98 version of FICO, a HELOC (or any revolving line of credit, as I understand it) with a CL that high will not be included in the calculation of utilization, as is the case in your situation.

However, a HELOC is still a revolving credit account.  So the report is technically correct - you have a high amount of revolving debt.  But like HTSU also noted, those red bricks on the FICO scale sometimes don't make any sense, and fundamentally those reasons don't have any effect on your score.  I generally ignore them now.

I am curious about one thing: on the HELOC entry on your TU report, what is being reported in the "Loan type" and "Account type" sections, or in the "Descriptions" area?

[Anonymous]

In my case my HELOC bounces back and forth between revolving and CC debt on TU 98.  It causes a pretty healthy swing i

[Anonymous]

Sorry for the delayed response:

Under Loan Type- Home Equity Loan

Account type- Overdraft / Reserve Checking

Under Credit at a glance it shows under Mortgages.

Very confusing.

Another thing when I go to use Fico Estimator, if I show paying off my CCs it does not give me much of a bounce , but if I show paying my ccs and my Heloc then it gives me a big bounce because it says I have a very large revolving balance due to the Heloc.

Do you think I would get a bounce if I pay off only the CCs down below 9%?

Thanks,

[haulingthescoreup]

---

@Anonymous wrote:

Sorry for the delayed response:

Under Loan Type- Home Equity Loan

Account type- Overdraft / Reserve Checking

Under Credit at a glance it shows under Mortgages.

Very confusing.

Another thing when I go to use Fico Estimator, if I show paying off my CCs it does not give me much of a bounce , but if I show paying my ccs and my Heloc then it gives me a big bounce because it says I have a very large revolving balance due to the Heloc.

Do you think I would get a bounce if I pay off only the CCs down below 9%?

Thanks,

---

How high is your CC-only util? It always helps to have that down around 1-2% or so. You will definitely see a score increase if your CC-only util was above 10%, and now you get it down very low. Also, you will benefit if the only reporting CC balance is on one card, instead of spread out over several cards. For best results, pay off all your cards but one, and let that one report $10-20, and then don't forget to pay it off before the due date, which is horribly easy to forget.

But that final score jump won't happen on TU98 until you can knock off the HELOC.

While I'm always all in favor of paying off any debt, anywhere, of any type, when it comes to scoring, it's only TU98 that worries about HELOC balances. And since fewer and fewer lenders pull TU98 FICO's, it might not necessarily be #1 on your personal financial to-do list. 

[Anonymous]

thank you very much for that really good information.

[Lel]

---

@Anonymous wrote:

Sorry for the delayed response:

Under Loan Type- Home Equity Loan

Account type- Overdraft / Reserve Checking

Under Credit at a glance it shows under Mortgages.

Very confusing.

Another thing when I go to use Fico Estimator, if I show paying off my CCs it does not give me much of a bounce , but if I show paying my ccs and my Heloc then it gives me a big bounce because it says I have a very large revolving balance due to the Heloc.

Do you think I would get a bounce if I pay off only the CCs down below 9%?

Thanks,

---

This is precisely the way that my HELOC is described on my TU report.

I also have a balance of about $79,000 on my HELOC, with a CL of $98,000.  But my HELOC has never been flagged as causing my revolving balance to be too high.

To clarify, it's on the "Understanding Your Score" page that you get this revolving-is-too-high comment, correct?  If so, I'd be inclined to ignore the comment, because it's not really part of your credit report and it appears to be scored and classified as mortgage debt on your actual TU credit report.  I also suspect that in your case the FICO simulator won't model your future score very well, since it sees your HELOC as revolving.  My prediction is that if you pay your CC balances down to low utilization, you'll see a score increase, but despite this you will still get that too-high comment on the UYS page.

Very confusing.  I agree.

[Anonymous]

Yes, Lel, that is where the notation is about my revolving debt being too high.

thanks for all your input, I think I understand now.

Best of luck.

[Anonymous]

I guess we add this to the list of FICO Scoring Mysteries

Some argue that HELOCs with certain characteristics count as revolving for scoring purposes on TU 98 but not TU04.  Some that they do not but the "unofficial"  indfo provided with the score makes it seem like that.

In my own case I see 30 point swings or so in my MYFICO TU score (which is 98) based on hoe the info is coded anfd it changes frequently.

All sides have reasonable arguments and i am not arguing for or against any of them at this time but it is curiosu.