If you are using over 40% of your available credit, paying off your credit cards with a HELOC may improve your credit score. However, there are some risks involved.

Applying and opening a HELOC will give your credit score a ding. However, you may be able to increase your score significantly by transferring your credit card debt to your home equity line of credit. How much your score will improve depends on the limit of your credit line. Lower limit HELOCs are generally recorded as revolving lines of credit when determining a borrower’s FICO score. Higher limit HELOCs are generally recorded as mortgages or installment loans.

Read more: Will Paying Off Credit Cards with a HELOC Improve My Credit Score?

Tags | credit cards, Heloc, home equity line of credit