Will Citiback HELOC be treated as Revolving or Installment?

[Anonymous]

Situation: I have $23K on a HELOC with a $54K credit limit. I am about to refi my house and I want to put another $20K on the HELOC (total of $43K) - primarily to pay down first mortgage to keep it at 80% LTV.

Question: By doing this will it drop my credit score? Currently at XPN - 779,EFX - 775,TUC - 757 (provided by the lender). I need at least a 750 to maintain the rate I'm about to lock in so sensitive to any drop in my credit score.

I've read the discussion about if a HELOC is treated as revolving vs installment. On my credit report it shows as REV, the code is C-1 which is putting it in a "Other" bucket at the top of the report (as opposed to real estate, installment or revolving). I thought if it were >$50K it would not be treated as revolving? If I put more money on the HELOC will it be treated as revolving and drag down my credit score?

Help please!

Message Edited by dalema on 01-15-2009 11:50 PM

[RobertEG]

A HELOC is a secured line of credit.  It is revolving, against you CL.

Message Edited by RobertEG on 01-16-2009 12:18 AM

[Anonymous]

Thanks. Would you think that it's most likely that if I draw another $20K (from 42% to 80% of the HELOC) it will be a big hit to my credit score?

I'd read on a lot of postings that if the HELOC is greater than $50K that it would not be treated as a CL. Is that fact or fiction?

Thankyou!

[Junejer]

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dalema wrote:

Thanks. Would you think that it's most likely that if I draw another $20K (from 42% to 80% of the HELOC) it will be a big hit to my credit score?

I'd read on a lot of postings that if the HELOC is greater than $50K that it would not be treated as a CL. Is that fact or fiction?

Thankyou!

---

You are correct about this. Even though it is actually a revolving LOC, the scoring system treats it as installment, due to the size.

[Anonymous]

Thankyou!

[haulingthescoreup]

The break-off figure may or may not be $40K.

I have a HELOC with a $50K CL, and it is definitely not counted in my util.

[Anonymous]

Thanks - that's reassuring.

[Anonymous]

Depends on how the bank reports your heloc.  Mine is reporting it as a LOC and currently it is being used against me as the scoring is taking the heloc in as part of credit card debt.  Although the draw period is closed for the heloc it completely skews my fica score, it looks like I'm caring $50k in credit card debt when in reality I only have $6k in credit card balances.

I'm currently struggling with the bank to get them to add a comment indicating it's a Home Equity Loan so at least I can explain that away easier or have the credit formulas catch that and not count against me in such a negative way.

[Lel]

mrcpu1, you stated the same thing in your post here:

http://ficoforums.myfico.com/t5/Mortgage-Loans/Converting-HELOC-to-HEL-Any-advantages-to-my-score/m-...

As I mentioned in my reply on that thread, the way your HELOC is reported does not necessarily mean that it will be scored in the same way.

Have you determined for certain that your HELOC is being included in your calculation of utilization of available credit?  How much do you think you score has dropped due to changes in your HELOC?  And have you reviewed the rest of your credit report to make sure that there is nothing else that could cause a drop in score?

Also, is the balance on the HELOC $30,000 as you mentioned in the thread above, or ~$44,000 as you mention here?