I have a personal line of credit which is moving into its "Repayment" phase -- i.e., no more borrowing against it, only repayments.
I'm wondering if it will report any differently to the credit bureaus.
E.g., will the credit limit still be factored into utilization, even though it is no longer available?
Is this close? "A line of credit can influence your credit score, depending on how you use it. If you draw a high percentage of the amount borrowed — taking $9,000 of the $10,000 available, for example — your credit usage will hurt your credit score. Likewise, taking below 30% of your draw is considered good use, boosting your score."
https://www.debt.org/credit/lines/
@FireMedic1 wrote:Is this close? "A line of credit can influence your credit score, depending on how you use it. If you draw a high percentage of the amount borrowed — taking $9,000 of the $10,000 available, for example — your credit usage will hurt your credit score. Likewise, taking below 30% of your draw is considered good use, boosting your score."
https://www.debt.org/credit/lines/
No. What I'm talking about is that some personal lines of credit have a finite shelf life. After a certain period of time, they move from the "draw" period (when you can borrow against them) to the "repayment" period (where you can no longer draw against them, but must simply pay down the balance, gradually if you choose).
During the draw period they report pretty much like a credit card, and utilization is based on the credit limit and reported balance.
But what I don't know is how they report during the repayment period.
Does it continue to report the credit limit and the reported balance in the same manner?
Or does it cease reporting the full credit limit?
Today I found out the answer, and am relieved. It does not report any differently. It still reports the full credit limit, so there is no negative impact on utilization.
Update 12/23: Well, my worst fears are realized. The PLOC which is now in repayment is now being marked as a closed account, with a "high balance" equal to my current balance. No reference to the credit limit at all. This is the case in both TU and EQ. I haven't seen that yet in EX but I would imagine it will be the same there.
I.e. it is now a total drag on my utilization and on my FICO scores, since it appears as a maxed out credit line.
Needless to say, I will have to pay it off now.
I now wish I had done that before the end of the "draw" period, but the bank customer service reps assured me that the PLOC would continue to report as it has in the past. Once again false information being spewed by CSR's.
Update 12/25: So far it appears to be marked as closed only in EQ and TU, while EX continues to report it correctly.