Many potential borrowers worry that their HELOC will show up as a giant (and sometimes maxed-out) credit card on their FICO reports. But, in most cases, there’s no need for concern.
Credit.com explains:
“The majority of time a HELOC is reported to the credit bureaus it is also accompanied by descriptive text, called a narrative code, which explains the nature of the account. For example, it is common to see the text “Home Equity Line” or “Secured by Home Equity” on a credit report along with a HELOC account. This text is picked up by smart credit scoring models and causes it to exclude the HELOC when determining credit card debt-related measurements of your credit reports.”
In general, a HELOC has no affect or a positive affect on credit scores.
For more information see:
Will a HELOC Affect My Credit Score?
Will Paying Off My Credit Cards with a HELOC Improve My Credit Score?
