FICO: Better To Pay Down HELOC Or Credit Card?
In looking at my credit score, my utilization of revolving credit is very high:
Experian shows my HELOC as "Credit Line Secured, Revolving".
Equifax shows it as "Revolving or Option".
Transunion shows it as "Overdraft/Reserve Checking Account".
I did not realize that secured credit lines were counted as revolving with the same weight as unsecured.
Anyway, which is better to pay off to increase my FICO score? Credit Line or Credit Card?
TYIA,
JohnCl
i dont think it matters which gets paid off.
one factor in your score is how much you owe compared to how much credit you have left to spend, simply reducing how much you owe will help.
do not be late on any payments
do not close any accounts
every six months call your creditors and ask for an increace in limits this helps your % of credit to dept, ** Note** do not just charge up because you have the ability to do so
the length of time each of these accounts is open also figures in there.
another factor is how many different types of credit do you have car loan, visa, house morgage ect...
hope this helps
John
I would pay down the oldest account first. Aging of an account helps the score, so be sure NOT to close out any account. Just leave it open and throw away the card (if the oldest is a card). I once had a customer that had 34 credit cards on their credit report. One would think their credit would be shot...however, only 28 had balances, and all of them only had about 40% of the max used. They all were over a few years old too. Therefore, they had scores in the HIGH 700's.
So, from this example you can see that having open credit card accounts helps.
I would pay down the credit cards first. They more than likely have higher rates than your HELOC, and having multiple credit cards with low current balance to high balance ratios will help much more than having ONE (ie HELOC) account with a low current to high balance ratio. Hope this helps!
Pay down the credit card first so you can take the tax deduction on the HELOC.
Good point! I totally missed that one! Credit cards all the way.