First, some background. My TU fico was 731 back in June of 2003. I had paid off all my debt and owed nothing. In Oct, i checked my TU fico and it was 671 due to all the new cc debt I had racked up (have you ever furnished a new house?). Still, I was only at about 35% utilization on my revolving accounts. Today, I checked my TU fico and it finally showed my mortgage and heloc reporting. I originally checked it via worthknowing and was extremely inquisitive of my score. I figure I would take a 50-75 point hit and was prepared for the worst. Well, low and behold, my new TU fico with the mortgage and heloc is 669. I cannot believe it only dropped 2 points. I am maxed out on my heloc (due to 80/20 100% loan) btw. My heloc is for 70k. The wierd thing is, under the "account type" heading, the heloc is listed as a "Mortgage Account". It doesnt say revolving. I wonder if thats the reason why my score didnt nosedive. I just hope the heading stays the same. What do you all think? Could it be that FICO is treating it as a mortgage installment account versus a revolving one?
I just looked closer and under the category "loan type", it states that it is a "home equity loan". I wonder if they distiguish "home equity loan" from a "home equity line of credit". A HEL is a fixed loan. A HELOC is a revolving loan. My loan is definitely a HELOC. I wonder if Countrywide is reporting my HELOC as a HEL, and FICO is treating it as such. Hmm, I wonder...
Thanks Butch. I fully undestand that a HEL is reported differently from a Heloc. I just wonder if Countrywide is reporting my Heloc as a HEL. Does that make sense? That is the only thing that I can think of which could be the cause of the minimal drop in Fico points. I just hope that they continue reporting it the same way
Sure it makes sense. lol Since you only took a 2 point hit you'll wanna leave it there. For awhile anyway. Good thinkin. .
I have a HELOC from my mortgage also. It was originally 19,500. It is from MorEquity. It reports on TU as a mortgage loan, no bad fico hit. On EX & EQ it reports as HELOC. I took a 50 point hit for that on those both.
Just an update. I checked my Equifax score and it is listed as an installment account. My fico was the same. Experian, however treats it as a revolving account, and I took a 30 point hit! Damn Experian. I wonder if there's any way to make Experian report it as an installment account?
Burnit, Could you tell me how long the heloc has been on your reports? I was wondering if Equifax will leave it as an installment account or will they later change it to a revolving one? I suppose if it has been an installment account for over 1 year, they should leave it alone. That would be great. I just need to find out how I can change my Experian report from a revolving account to an installment one.
I have a HELOC from my mortgage also. It was originally 19,500. It is from MorEquity. 1*It reports on TU as a mortgage loan, no bad fico hit. 2*On EX & EQ it reports as HELOC. I took a 50 point hit for that on those both. BurnIt ============== I&2 Any loan secured by real estate is a motgage and must report as such. THE END ** *** ** LB 59 """"```--~~~~~~~~~--```'""'''
1*My heloc is for 70k. The weird thing is, under the "account type" heading, the heloc is listed as a "Mortgage Account," 2*It doesn't say revolving. I wonder if that's the reason why my score didn't nosedive. 3*I just hope the heading stays the same. 4*Could it be that FICO is treating it as a mortgage installment account versus a revolving one? Slee ============ 1*Nothing weird about it at all as that's how it should list. 2*Yep. 3*No reason it should change. 4*No reason to treat it as anything else.
LBrown, I&2 Any loan secured by real estate is a motgage and must report as such. Is this a rule? I've contacted MorEquity. They told me they are reporting correctly. I've called the CRA. They say they report as they are told. Is there more leverage I can use other than LBrown said so? LOL Thanks!
I would also like to know the answer to this. I want Experian to report my heloc as a mortgage loan and not a revolving line of credit.
I am SO glad I saw this on here...I wanted to post on a different forum about this but wasn't allowed. The HELOC is SO dangerous nowadays and loan officers are hurting borrowers left and right without knowing it! First off it is so hard to know how the ending mortgage company.......the original one or one that ends up buying your loan will code this. Lender A may code it a mortgage and Lender B that takes over the loan may call it a revolving account. Helocs are great if you have 100k in equity and you get a 100k line of credit and only pull out 50k or less of it. When you are talking about a purchase....the heloc is maxed out.meaning you are pulling the final 20% of your equity out and thus are taking 100% of your line. The main problem with this is that 9 times out of ten it will be recorded as revolving (and for the sake of risk lets just assume that it will ALWAYS be recorded as this becaus eliek I said before you have no control over how a lender reports it) and the revolving will be a maxed out revolving account. This tanks your score right away on its own but when you look at the "total revolving availale" and "total used" what this does because of the sheer size of a heloc type loan (compared to a maxed out 500 dollar cc) is show you at your limits across the board as far as your available credit. This is the BIGGEST travesty in mortgage today. I am bombarded by wholesale lenders every day that are pushing the 20% heloc and even the 100% purchase HELOC! This is crazy and can turn a 720 credit score into a 620 in no time if the situation is right. I have called several lenders about this and the basic feeling I get is "duh, if their scores tank then they cant refinance later on" they don't come out and say it but I know this is why they do it. I am talking from experience here as well..have "lost" a few clients to other mortgage guys that will offer a 6% heloc for a purchase where I was offereing a 8 or 9% fixed second loan. (which at the loan amounts 20% are, the 2% dont make that much of a difference). These people, even after I told them of the things that could happen, have come back to me and told me that their scores tanked and their revolving is so maxed out that they cant get a car loan. The HELOCS are especially dangerous if you are looking to "just get in and refinance down the road".........when your scores tank.....you wont be able to do anything close to what you can now with your scores. Well as you can tell I am passionate about the HELOCS and while they are good for some situations you really have to be careful and unfortunatley not all of the mortgage guys understand the impacts of the advice they are giving. Good luck and glad I could answe you here!
I don't think lbrown59 is right on this. A HELOC is exactly that--a line of credit, revolving, and can be reported as such. Yes, it is secured by collateral in the home, but it's not a closed end mortgage (although a Home Equity Loan is). If it's a line of credit, the creditor has every right to report it as a revolving account. It may be noted that it's a Home Equity LOC, but it's still a revolving line of credit. The difference is that with the LOC you have ready access to cash (usually a LOT of cash), and if a lender is looking at available revolving credit which could be used, this must be included.
the helocs i do just say secured, not mortgage, revolving or installment. every lender is different and how they report will vary regardless of what lbrown says they should. my 1st MORTGAGE continues to report as an installment on one of the bureaus no matter what i do, but it isn't hurting the score so i don't sweat it. if you feel it is in error, dispute it with the bureau and send a copy of the mortgage you signed at close (which you should have gotten a copy of), although i don't know if they will change it. i agree with the above post about taking into consideration the amount of credit available.
