Having Your Home Equity Line of Credit Reduced Will not Lower Your Credit Score
The limit on your home-equity line of credit has been reduced, causing the amount of debt you have compared with the limit to shoot up — that’s bad news for your credit score.
If you answered false — you’re right!
Yes, home-equity lines of credit are considered revolving debt — you can continuously borrow money and pay it off up to a specified limit.
But the FICO Score categorizes home-equity lines of credit separately from credit cards, which are also considered revolving debt.
So even if a reduced HELOC limit results in a higher ratio of debt, your credit score will not be affected.