Home Equity Lines of Credit and Your Credit Score, Gas Prices

What You Need to Know and Do

Now more than ever, you need to make sure you understand what’s on your credit report – and you need to know what steps you can take to improve your score. For example, did you know that a Home Equity Line of Credit (HELOC) can impact your credit score quite dramatically – and sometimes unfairly – depending on how it is reported?

Here’s What You Need to Know… and Do!

First, you need to know that HELOC’s are commonly reported by the three credit bureaus as revolving accounts. In reality however, they do not fall under the typical revolving terms, even though they are set up in the same way as a revolving account. That’s because HELOC’s are secured by an asset.

Here’s the Good News…

The Fair Credit Reporting act requires reporting agencies to report true and accurate information. So when a HELOC is reported as a revolving account, you can actually send a letter to the three credit bureaus asking them to change the type of account from “Revolving” to “Line of Credit” or “Other.” This way, the account will not be rated by the scoring system using the “Balance to Limit” ratio scenario – which can drop a credit score by as much as 75 points if the HELOC is maxed out to the limit of the available credit line.

A Final Word of Advice

If you do decide to send a letter, you should send it as a Certified Letter, along with a copy of the HELOC agreement. You may have to send the letters more than once, but persistence is the key to accomplishing a positive result with the bureaus.

Here are some tips to help you spend less money at the pump:

• Find out who has the cheapest price of gas by checking out websites like GasPriceWatch.com or GasBuddy.com.
• Using cruise control while highway driving will help you keep a consistent speed and conserve gas.
• Be mindful of the speed limit. According to the U.S. Department of Energy, you can assume that each 5 mph you drive over
• 60 mph is equivalent to paying an additional $0.24 per gallon for gas.
• Not only is carpooling an obvious way to conserve gas–but in many cities those vehicles with more than one passenger have access to High Occupancy Vehicle (HOV) lanes which are less busy. Also, consider telecommuting if your employer will allow.
• Consider using public transportation.
• The Federal Trade Commission suggests removing unnecessary heavy, bulky items from your trunk–and also encourages you to avoid packing heavy items on top of your car.

 

Deborah Bremner
The Bremner Group at Coldwell Banker
REALTOR, 00588885,
ABR, CDPE, eAgent, CSP, SFR, HRC, CRE
(O) 310-571-1364 DIRECT
(D) (310) 800-2954
Accredited Buyer Representative | Certified Distressed Property Expert | Pre-Foreclosure Specialist Certified

I want you to know that I appreciate any referrals from friends and associates who may be in the market to buy or sell real estate. You can count on me giving them the same high-quality service I provide to all of my clients.