Moneyhungri, Both Buyer and Seller in Fort Lauderdale, FL

Does a HELOC adversely affect one's credit score?

Asked by Moneyhungri, Fort Lauderdale, FL Mon May 6, 2013

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A home Equity Line of Credit will impact your credit in a similar way as other credit lines, however consider the following :

Can a HELOC hurt your credit score

A few examples of when a HELOC can adversely affect your credit score:When your credit history is blemished already. 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. Credit reporting companies 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. Hence, 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.
0 votes Thank Flag Link Mon May 6, 2013
All loans will give you an initial hit on the score when first acquired, but that is short-lived. The HELOC like any other debt instrument will work for your benefit if paid as scheduled and with no late history. A HELOC is viewed as a credit card (revolving credit), so keeping a low balance on it and using it only for large purchases (then lower it, then repeat) will show good credit management.

Tony Vega
Antonelli Realty
0 votes Thank Flag Link Tue May 7, 2013
I have not heard of that happening. You may want to ask a mortgage broker. Call Preston Ware at 561-329-0075 or go to his website at http://www.PrestonWare.com. He'll be able to tell you what you need to know about HELOCs and credit.

Marc Jablon, The Jablon Team
RE/MAX Complete Solutions
JablonTeam@gmail.com
561-213-6139
http://www.JablonTeam.com
Web Reference: http://www.JablonTeam.com
0 votes Thank Flag Link Mon May 6, 2013
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