Make HELOCs work for you
Today we’re going to discuss how a HELOC (Home Equity Line of Credit) can negatively impact your credit. Odds are some of you out there have tapped into the equity in your home to finance your business endeavors. Quick and easy right? Yes, but it may have devastating effects on your personal credit. You’ve done everything you’re supposed to, paid on time, and have no clue why your score went south. Here’s why:
30% of your personal credit score is made up of how much of your credit has been utilized. Of particular importance to a lender is the percentage of your revolving you have used. When that number exceeds 30% your scores can suffer. When that number exceeds 50% your scores can plummet. Sometimes by as much as 50 points for a single occurrence.