Personal Line of Credit

[corymcd88]

I was talking to my CU and they said that I can use all of my LOC and max it out and it does not affect my score or my CR at all because a LOC is different then a CC on how it is reported. Does anyone know if that is true?

[Involver]

Do not believe that person.

[Anonymous]

I believe that most LOCs report as revolving, making them similar to a CC.

I have heard of a very occasional case where an LOC reports as installment.

It's also possible that a specific LOC doesn't report at all.

My PSECU LOC reports as "Check Credit or Line of Credit", and is categorized as revolving on my EX report.

[kroberts67]

I have a LOC with my CU, but it's really just an overdraft account.  It does show up on my report and counts towards my UT.  On EX & EQ it is included in revolving.  On TU it shows as "Other".  If I use it, unlike my c/c, it's considered a cash advance and so interest starts the moment I use it.  You might clarify with them if it's treated like credit or cash advance.

[kroberts67]

And I definately wouldn't believe the rep who said it doesn't report!  Credit is credit.

[improvingmycredit]

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@corymcd88 wrote:

I was talking to my CU and they said that I can use all of my LOC and max it out and it does not affect my score or my CR at all because a LOC is different then a CC on how it is reported. Does anyone know if that is true?

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Hey corymcd88!

Generally, LOCs report just like a CC so it can affect your utility and your FICO.  However, some CUs report LOCs as an installment loan and in this case, it will not affect your revolving utilty.  In this case, the LOC may affect your AAoA and thereby possibly affect your FICO.  This is just a generalization because there are always other factors taken into account to determine FICO scores.  I suspect that your CU may report the LOC as a fixed rate loan.  I have 2 LOCs from 2 different CUs.  One reports as a revolver and the other an installment loan.  

[corymcd88]

It is with Associated FCU. That is what I thought it did go to UT. My credit mentoring is saying it does count. I have had things on my monitoring report wired because of AMEX NPSL.

[Creditaddict]

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@corymcd88 wrote:

I was talking to my CU and they said that I can use all of my LOC and max it out and it does not affect my score or my CR at all because a LOC is different then a CC on how it is reported. Does anyone know if that is true?

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Can you hear Suze Orman "ARE YOU KIDDING ME?!"

Unless this Loc is not on your credit report rather it's revolving (most are) or installment, it still will very much effect your credit... now how bad it effects would be if it's installment then it won't hurt your util. but it's another account reporting a balance and another account factored into DTI so depending if all your other accounts are reporting balances and if you have other installments, adding another installment could be just as bad as adding another revolving balance account.

[Revelate]

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@corymcd88 wrote:

I was talking to my CU and they said that I can use all of my LOC and max it out and it does not affect my score or my CR at all because a LOC is different then a CC on how it is reported. Does anyone know if that is true?

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Anecdotally we've had reports that LOC's with balances around 30-35K are treated as installment (as of a few years ago, can like dig it out of Google or the L/ithium search perhaps); however, for the typical use case it's treated as revolving and it should be taken as such.

That said, it's possible their CU does report it as an installment loan, but I'd take anything any LO states with a grain of salt regardless of financial institution or financial product.