According to reports, some home equity line of credit lenders are freezing accounts based on declining credit scores.

The Arizona Republic reports:

“It also might be smart to check your credit report, evaluate your credit score and make fixes if necessary. Sometimes a drop in credit quality triggers a freeze, not just a declining home value.

Unfortunately, a HELOC freeze itself can lower your credit score because it will show you as having used a larger percentage of your remaining borrowing capacity.”

Most home equity lines of credit are frozen based on declining home values. But, this is certainly something to watch out for.

Remember: you are legally permitted a free copy of your credit report from each national reporting company (Equifax, Experian, and TransUnion) once every 12 months. You can receive these reports by visiting AnnualCreditReport.com or checking out the instructions on the FTC website.

See Also:

Will Taking Out a HELOC Affect My Credit Score?

How the HELOC Freeze Can Damage Your Credit Score

Tags | credit score, FICO score, FTC, Heloc, heloc freeze, home equity line of credit, mortgage crisis