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HELOC at $200K limit in terms of FICO scores? (impact to credit utilization/FICO score or not?)

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Anonymous
Not applicable

HELOC at $200K limit in terms of FICO scores? (impact to credit utilization/FICO score or not?)

Question:

1) Are HELOCs counted as revolving credit, for the purposes of FICO scoring, such that the larger the heloc balance vs. limit, the worse your credit utlization would be, and therefore a potential for a negative impact on one's FICO scores?

 

In our case, we are tentatively planning to request $200K for a HELOC. I have been seeing posts where people say that their HELOC hurt their Fico scores because their HELOC was counted as revolving credit and were figured into their credit utilization. But other people have said, no, a HELOC over X amount (not sure how much, $50K or more perhaps??) does not count as revolving credit and does not affect credit utlization scores. 

 

I am trying to understand what would be true as far as FICO impact in or case.

 

Thanks for reading.

 

 

4 REPLIES 4
SouthJamaica
Mega Contributor

Re: HELOC at $200K limit in terms of FICO scores? (impact to credit utilization/FICO score or not?)


@Anonymous wrote:

Question:

1) Are HELOCs counted as revolving credit, for the purposes of FICO scoring, such that the larger the heloc balance vs. limit, the worse your credit utlization would be, and therefore a potential for a negative impact on one's FICO scores?

 

In our case, we are tentatively planning to request $200K for a HELOC. I have been seeing posts where people say that their HELOC hurt their Fico scores because their HELOC was counted as revolving credit and were figured into their credit utilization. But other people have said, no, a HELOC over X amount (not sure how much, $50K or more perhaps??) does not count as revolving credit and does not affect credit utlization scores. 

 

I am trying to understand what would be true as far as FICO impact in or case.

 

Thanks for reading.

 

 


I have no personal experience with them, but from what I  have read, different lenders report them different ways.

 

Also, even if it is reported as revolving credit, an account with a limit of that size may be excluded from FICO utilization calculations.


Total revolving limits 741200 (620700 reporting) FICO 8: EQ 701 TU 704 EX 685

Message 2 of 5
Anonymous
Not applicable

Re: HELOC at $200K limit in terms of FICO scores? (impact to credit utilization/FICO score or not?)


@Anonymous wrote:

Question:

1) Are HELOCs counted as revolving credit, for the purposes of FICO scoring, such that the larger the heloc balance vs. limit, the worse your credit utlization would be, and therefore a potential for a negative impact on one's FICO scores?

 

In our case, we are tentatively planning to request $200K for a HELOC. I have been seeing posts where people say that their HELOC hurt their Fico scores because their HELOC was counted as revolving credit and were figured into their credit utilization. But other people have said, no, a HELOC over X amount (not sure how much, $50K or more perhaps??) does not count as revolving credit and does not affect credit utlization scores. 

 

I am trying to understand what would be true as far as FICO impact in or case.

 

Thanks for reading.

 

 


@Anonymous consider this, as far as version 8 goes:

 

1. EQ8 appears to either treat it as a regular Revolver or totally ignore it, as it lacks reason code indicating its tracking it.

 

2. TU8 & EX8 have the following Reason Codes, so a reasonable person might think they might be looking at them in this way:

 

'Proportion of balances to credit limits on revolving HELOC accounts is too high'

 
'Proportion of revolving HELOC balances to total revolving balances is too high'
 
(Keep in mind that balance to balances not to limits.)
 
It will be too large to be trackked on the old scores I believe. 
Message 3 of 5
Anonymous
Not applicable

Re: HELOC at $200K limit in terms of FICO scores? (impact to credit utilization/FICO score or not?)

Thank you @Anonymous and @SouthJamaica . So if, as Birdman quotes below, they look at proportion of balance to credit limits, would it be better to have a higher credit limit that we don't use all of, just like with revolving credit? So to apply for as much as we can qualify for??

 

Message 4 of 5
Anonymous
Not applicable

Re: HELOC at $200K limit in terms of FICO scores? (impact to credit utilization/FICO score or not?)


@Anonymous wrote:

Thank you @Anonymous and @SouthJamaica . So if, as Birdman quotes below, they look at proportion of balance to credit limits, would it be better to have a higher credit limit that we don't use all of, just like with revolving credit? So to apply for as much as we can qualify for??

 


@Anonymous ues that would probably help at TransUnion and Experian, but keep in mind the other metric that looks at HELOC balances over total revolving balances in addition. 

Message 5 of 5
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