Avoid The Home Equity Line of Credit (HELOC)
If it comes down to a choice between taking out a home equity loan and a home equity line of credit (HELOC) you should always choose to take out the home equity loan.
The reason that taking out the loan as opposed to getting the line of credit is preferable is because on your FICO score the line of credit is automatically reported as an installment trade line.
Taking out a Home Equity Line of Credit can be calculated by your FICO store to be part of your revolving debt. If you care carrying a high balance on that debt that this could wreak havoc with your credit score numbers.
As a rule of thumb – avoid HELOCS and take out a loan instead.