Do HELOCs affect your credit score?

Making on-time payments is one factor that may positively impact your credit score, while late or missed payments can negatively affect your credit score. HELOCS are considered a revolving type of credit like credit cards, but they don’t impact your credit score the same way. Remember that credit utilization is a factor in your credit score.

Does a HELOC affect my revolving credit utilization?

Sometimes affects your revolving credit utilization: FICO ® Scores ☉ are designed to exclude HELOCs from credit utilization calculations, but your HELOC's balance and credit limit could affect your utilization for VantageScore® credit scores. A HELOC could also affect your credit in different ways depending on how you use the account.

Is a HELOC better than a mortgage?

Thus, a HELOC can add variety to your credit history while also carrying the weight of a mortgage-related loan, which is viewed as more dependable by credit bureaus because it’s attached to collateral. Another factor to consider is whether you pay your HELOC payments on time every month.