 TITLE: How Does a HELOC Affect Your Credit Score? CONTENT: HELOCs and Your Credit\n----------------------\nThe impact a HELOC has on your credit score depends on how you use the funds and manage the account. You can help your score by making on-time payments on your HELOC. Like with any credit account, however, if you're late on a payment your score will suffer.\nIf you're using a lot of the available credit on your credit cards, you likely have a high credit utilization ratio that is hurting your score. Using your HELOC to pay off those credit card balances—as long as you keep the balances at zero going forward—will lower your utilization and can give your scores a boost.\nOne common misconception about HELOCs is that the balance figures into your credit utilization ratio. But because a HELOC differs from other credit lines in that it is secured by your home, FICO® (the credit score used most often by lenders) is designed to exclude HELOCs from revolving credit utilization calculations.\nAnother thing to keep in mind: Your lender will perform a hard credit inquiry when you apply for a HELOC. Your score may drop by a few points (if at all), but the impact diminishes over time. END