Too high proportion of balances from loans not secured by real estate

VantageScore code number

Code numbers can differ by bureau and score version. The wording of the statement is what to match.

What puts this reason on your score

VantageScore's explanation says the total you owe on loans not secured by real estate is high, a sign of increased risk. A homeowner with a $250,000 mortgage and $10,000 of other debt has about 4% of the total outside real estate. A renter with the same $10,000 and no mortgage has 100%.

Renters see this code often, and so do people who paid off a mortgage while still carrying other debt. The 3.0 list has no statement worded this way.

What to check on your credit report

• Your totals for card, auto, personal and student loan balances
• A home loan that should be reporting and isn't
• Large card or personal loan balances you could pay down first

What you can do about it

• Pay down card and personal loan balances. They shrink the non-real-estate share.
• Don't take a home equity loan only to shift the mix. The cost and the risk to your home outweigh a reason code.
• If you're buying a home, expect this code to ease once the mortgage starts reporting.

How soon a change can show

The share updates as balances are reported each month. Card paydowns move it within a cycle or two, and a new mortgage changes it when it first reports.

If you are applying for a mortgage

For a first-time buyer this code usually comes with renting and fades after closing. Before the application, work on what you can move: lower card balances and on-time payments.

Guides that go deeper

• How much credit mix counts in your scoreCredit mix is 10% of a FICO Score, and FICO says you don't need one of each account type. The math on taking a loan just to improve mix rarely works.
• Paying down balances before a loan application: timing and rescoresPaying cards down before you apply only helps once the new balance reports. How to time it, which cards to pay first, and how a lender's rapid rescore works.
• Getting your credit mortgage-ready in 12 months, month by monthA month-by-month credit plan for the year before a mortgage: what to check, what to fix, what to leave alone, and the timing rules underwriters use.
• What your credit score reason codes are telling youReason codes list what held your score back the most, in order. What the common ones mean, which you can act on, and which to leave alone.