How Often Does Reporting Occur for Home Equity Lines of Credit?

Home equity lines of credit are serious obligations and appear on all credit reports. A home equity line, which is also called a HELOC, is a real estate loan tied to the equity in a home. Lenders reviewing an application for credit always take note of how well the prospective borrower is paying real estate loans. People with excellent credit scores and control of their finances usually never are late with a mortgage or home equity loan payment.

Credit Bureaus

Major credit bureaus such as Equifax, Experian and TransUnion rely on banks, mortgage companies and other lenders to provide updates on home equity credit lines and other obligations. The creditors usually provide the credit bureaus with electronic updates once a month. The updates include balances, the minimum monthly payment and current status.

Credit Scores

Credit scores are computed from information on credit reports. A missed payment on a HELOC can cause a significant drop in credit score, although no one can say precisely how much an individual's score will be affected. All credit situations are different, and people with high credit scores are hurt most by late payments. The credit score is a three-digit number ranging from 350 to 850. Few people achieve a perfect score, but scores of 720 to 750 are considered outstanding. Scores in that range lead to the lowest interest rates on credit cards and loans.

Credit Repair

People seeking to improve credit must pay all bills on time while keeping balances low. That includes balances on home equity lines. Creditors like seeing large credit limits and low balances because that shows the debtor is managing credit responsibly. Ideally, balances on home equity lines should not exceed 10 percent of the credit limit. That means someone with a $50,000 HELOC should not carry a balance of more than $5,000. If that level is topped, the debtor should pay down the balance as quickly as possible.

Credit Review

Free credit reports are available from AnnualCreditReport.com. It is the only site authorized to distribute free reports under the terms of the Fair Credit Reporting Act. People are allowed up to three free credit reports each year, and can use the reports to monitor updates on HELOCs and other loans.