HELOC and FICO Score

[EconoMutt]

Does anyone know if the amount you have on a HELOC is factored in to your FICO Score?
I know if you have a $10,000 limit on your credit card and you're using $9,500 of it, it will affect your score.
Recently my FICO score went down. I have good credit, but am consolidating debt by using my HELOC.
Could this be why my FICO took a hit?

[maat55]

Did you close any accounts when you consolidated your debt? The act of consolidation may have changed your debt to available credit ratio.

[EconoMutt]

I haven't closed any accounts yet.
The HELOC is new. I did apply for other new accounts.
Maybe the number of inquiries has affected the score.

[EconoMutt]

FYI- I just found this on Bankrate
Does credit utilization of a HELOC negatively impact a credit score? As with any loan or revolving account, using a HELOC account will impact the person's FICO score, but often the amount of impact is small. That impact can be positive or negative depending on a variety of things, including the account balance, payment status and what other information is on the credit report.
What happens to a credit score when a consumer uses a HELOC to consolidate credit card debt? (Let's assume that they don't cancel the credit cards.) That depends on a variety of factors, too. Just opening the HELOC will ding the person's score a bit. If the new HELOC's balance is close to the loan's limit, that could also ding the score. On the other hand, paying off high balances on credit card accounts will usually help the person's score. And leaving the card accounts open may help the person's credit utilization rate, which is good for the score.
Should homeowners get a HELOC for more than they need so they don't "max out" the loan? It won't hurt the person's FICO score to have a higher loan limit. This strategy might be OK if the higher limit doesn't seduce the consumer into using more credit than he or she can comfortably repay -- a big if. Another obvious danger is that with HELOCs, the house itself is at risk if the loan payments can't be made.

[Nodebt13]

leverage Debt to pay Debt is what we need to learn in America.

your Debt Ratio is not affected since you are not closing Credit cards.
Which you should not do. Your are Swapping places from credit card to Heloc.

advice as soon as you get pay put the money in the Heloc. That will lower your average daily balance so they will charge less interest.
Makes no Cashflow-sense to put money in a checking at 0 interest.
If you go to the lovely bank system and ask them to do a direct Deposit from your Company to the HELOC. They will Say NO can't do it. it the same bank and everything .... But I need to charge you interest for Friday, Saturday, Sunday and by Monday if you remember to do it you will have less Money.

[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.

[EconoMutt]

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.

That makes sense. My HELOC has a $50,000 line of credit and I'm using all $50,000.