Wells Fargo Closed All Personal Lines of Credit

Wells Fargo announced earlier this month that they were closing down their personal lines of credit. These credit lines allowed consumers to borrow between $3,000 and $100,000. According to Wells Fargo, they will no longer offer personal lines of credit in the future.

For consumers who had a personal line of credit with Wells Fargo, this news is likely less than ideal. If you were one of those consumers, you might have a lot of questions: will this impact your credit score? What should you do now?

You have options. We’ve compiled the information you need, plus some alternatives to personal lines of credit. While this news might’ve come as a surprise, there are things you can do to make sure your finances are covered.

What is a Personal Line of Credit?

For the unaware, a personal line of credit is a set amount of money you can withdraw from whenever you need it. They’re basically a loan—a lender provides you with the money, and you can choose to repay it either right away or over a specific period of time.

Personal lines of credit might sound an awful lot like credit cards. And they can serve essentially the same purpose. But personal lines of credit often have a higher credit limit than credit cards. That’s why consumers might use a personal line of credit for debt consolidation, medical bills, etc.

What to do With Your Existing Wells Fargo Balance

Before we dive into alternatives, let’s tackle the obvious: your existing balance. How will you pay it off? You’ll receive a 60-day notice from Wells Fargo before your personal line of credit is closed. From there, you’ll have a minimum monthly payment to pay off, as well as a fixed interested rate.

Will Closing My Personal Line of Credit Impact My Score?

In a nutshell: maybe. It’s difficult to predict exactly how closing a credit account can impact your credit score. Plus, it can depend on a lot of things: how long your personal line of credit was open, how much credit you were using, etc.

Keep an eye on your credit score and report after your personal line of credit closes, just in case. The Track It feature from ExtraCredit allows you to see 28 of your FICO scores, plus your credit reports from the three major credit bureaus. And if you do see a dip in your score, ExtraCredit has other features that could help you know what you need to do to get your score where you want it to be.

You Have Alternatives

Once your Wells Fargo personal line of credit closes, what will you do? If you still need some cash, here are some alternatives:

A new personal line of credit: Possibly the most obvious option, you can simply open a new personal line of credit with a different lender. Many banks and other financial institutions offer personal lines of credit.
HELOC: You could also take out a home equity line of credit (HELOC) instead. A HELOC is pretty similar to a credit card, except it’s secured by equity on your home. Think of a HELOC as a second mortgage.
Personal loan: Personal loans are pretty similar to personal lines of credit, except you’ll withdraw from a lump sum and will have to make lump sum payments. Otherwise, you can use a personal loan for just about any reason you’d use a personal line of credit—both are commonly used for bigger purchases.
Credit card: If you have a smaller purchase to make that you can pay off shortly, a credit card might be a good option for you. Plus, if you qualify, you can have access to credit cards with useful perks and rewards. Just keep in mind that credit cards often have a lower credit limit than personal lines of credit.

This News Isn’t Ideal—But You Have Options

Wells Fargo’s decision to shut down its personal lines of credit is definitely inconvenient. Luckily, you have a few alternatives. Before you take the plunge and decide, make sure to take a good look at your finances and specific needs.

Worried about your credit score taking a hit after your personal line of credit is closed? You can easily monitor your FICO scores, plus all three of your credit reports, with ExtraCredit.

Update: After receiving multiple complaints, Wells Fargo has recently announced that they are keeping personal lines of credit. But there’s a catch—only customers who were either actively using a personal line of credit or had an old one that they want to reopen will be able to keep their accounts. Personal lines of credit will not be available for new customers.

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