 TITLE: What Is a Draw Period on a HELOC? CONTENT: How Can a HELOC Affect Your Credit?\n-----------------------------------\nWhen you apply for a HELOC, the lender will perform a hard inquiry into your credit, which can cause a small, temporary dip in your credit score. After you're approved, a HELOC can negatively or positively affect your credit depending on how you use and repay the loan.\nFor example, if you have lots of high-interest credit card debt, you probably have a high credit utilization ratio, which can lower your credit score. Drawing from your HELOC to pay off your credit card balances could reduce your credit utilization ratio and improve your credit score, as long as you don't run up the credit card bills again. Because HELOCs are secured by your home, your FICO® Score☉ (the credit score most commonly used by lenders) won't reflect them in your credit utilization.\nMaking on-time payments both during and after the draw period on your HELOC can also help to boost your credit score. Just be aware your monthly payments will increase when your HELOC closes. If you're not prepared to handle them and miss a payment, it could damage your credit score. END