credit

[DaveJ]

It depends. Does the insurance company even report to one of the credit agencies? If you're not sure, just ask them. Not everyone reports.

Hmmm... hadn't thought of that, thanks! They're an insurance co. so I just assumed they'd be out to screw you no matter what...

Dave

 

[Vic]

MattCo, your credit should be fine. Contrary to popular myth, having high-limit credit cards with small to no balances is a positive for mortgage lenders, not a negative -- demonstrates an ability to be responsible and have credit and not use it. Having your limits lowered may actually harm your score, leave them as they are and keep up the good work of paying off the balances in full every month. edit: mortgage lenders do not even calculate the amount of available credit a borrower has against their income, that is a myth. Debt ratio calculations only include existing payments on debts currently outstanding -- NOT potential debts as yet unborrowed (i.e. available high credit). On the other hand, Fico scores do calculate available credit limits as a ratio against balances owed. The higher the balances against the limits, the more the potential harm against your score. Always try to keep your borrowing to less than 50% of your available limit, or your score could be significantly harmed.

DaveJ, insurance companies do not report to the credit bureaus (except in extreme cases where they send a past due account to collections -- doesn't sound like what happened to you), so your score should be unharmed. You should communicate with your mortgage lender to make sure that they have the proper information on your homeowners' insurance and that this mistake doesn't happen again.

 

[MattCo]

Originally posted by: Vic
MattCo, your credit should be fine. Contrary to popular myth, having high-limit credit cards with small to no balances is a positive for mortgage lenders, not a negative -- demonstrates an ability to be responsible and have credit and not use it. Having your limits lowered may actually harm your score, leave them as they are and keep up the good work of paying off the balances in full every month. edit: mortgage lenders do not even calculate the amount of available credit a borrower has against their income, that is a myth. Debt ratio calculations only include existing payments on debts currently outstanding -- NOT potential debts as yet unborrowed (i.e. available high credit). On the other hand, Fico scores do calculate available credit limits as a ratio against balances owed. The higher the balances against the limits, the more the potential harm against your score. Always try to keep your borrowing to less than 50% of your available limit, or your score could be significantly harmed.

Thanks for the information guys, sounds like the smart money is on leaving it as is.

-MC

 

[MattCo]

[double post]