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Posted on 11 February 2017 | 3,668 views

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 theĀ 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.


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