Skip to content
×
Try PRO Free Today!
BiggerPockets Pro offers you a comprehensive suite of tools and resources
Market and Deal Finder Tools
Deal Analysis Calculators
Property Management Software
Exclusive discounts to Home Depot, RentRedi, and more
$0
7 days free
$828/yr or $69/mo when billed monthly.
$390/yr or $32.5/mo when billed annually.
7 days free. Cancel anytime.
Already a Pro Member? Sign in here

Join Over 3 Million Real Estate Investors

Create a free BiggerPockets account to comment, participate, and connect with over 3 million real estate investors.
Use your real name
By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.
The community here is like my own little personal real estate army that I can depend upon to help me through ANY problems I come across.
Private Lending & Conventional Mortgage Advice
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

Updated about 5 years ago on . Most recent reply

User Stats

922
Posts
533
Votes
Jim Goebel
  • Real Estate Investor
  • Des Moines, IA
533
Votes |
922
Posts

Using a HELOC; impact on Credit Score ? Bummer

Jim Goebel
  • Real Estate Investor
  • Des Moines, IA
Posted

We use MINT.com, which is nice.

According to MINT, what is largely dragging our credit score down (it's a 758) is credit utilization.

That's a few credit cards here and there but predominantly our HELOC is 60% utilized and bringing up our total credit utilization up over 40%.

I'm under the understanding that many people use HELOCs as a great way to pull out equity from their primary residence.

I don't understand why one would be penalized from having a stronger equity position in their primary residence?

Take for instance if we own a $200k house, and are maxed LTV and fully financed with a 1st mortgage, balance of $160k as compared to say having a first mortgage balance of $60k and another $80k balance in a HELOC.

Seems the 2nd scenario is worse for our credit (because of revolving debt) than the 1st - which confuses me.

Anyone have anything to share on this?

Most Popular Reply

User Stats

922
Posts
533
Votes
Jim Goebel
  • Real Estate Investor
  • Des Moines, IA
533
Votes |
922
Posts
Jim Goebel
  • Real Estate Investor
  • Des Moines, IA
Replied

@Steve Vaughan

Steve I think you're misunderstanding something.  Thanks for the comment though.

What I'm getting at is that comparing two scenarios....

#1 I'm at a $200k property value with a $160k balance

#2 I'm at a $200k property value with a $60k balance on 1st note and $80k balance on HELOC. Total $140k debt

Scenario #2 is better from an equity position compared to scenario #1.

Why would this hurt our credit, is my point?

Thanks for the other comments by the way...  I am confused though why/how your credit score has not impacted your ability to borrow since 2012?  I mean, our credit score is deemed excellent so maybe there's a point of diminishing returns but I definitely have seen an uptick in our offered terms (%) on financing in the last couple loans.

Loading replies...