Quote:
Originally Posted by nataliya
Here are a few examples of when a HELOC can adversely affect your credit score:
* When you have a checkered credit history. If you have a spotty credit history with missed and overdue payments, requesting a home equity line of credit and taking on additional debt will probably have a negative impact on your credit score. The credit bureaus tend to view this as taking on additional risk.
* The "50/50 Rule." A HELOC with a line of credit that exceeds $50,000 is generally regarded as a type of second mortgage that can be helpful to your credit score, but a HELOC of less than $50,000 is usually viewed as a credit card with a large credit line. Therefore, if your HELOC is less than $50,000 and your balances exceed 30% of your total available credit, this will be detrimental to your credit score.
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That makes sense. My HELOC has a $50,000 line of credit and I'm using all $50,000.