Will using up your entire home equity credit line count negatively on your credit report and score even if you are never late on your payments?
Late payments aren't everything. Credit scores not only consider whether your account payments are current or late, they weigh all of the details of your credit history and how those details interrelate.
Using your entire available credit limit, on even one account, is a strong indicator of high credit risk, even if all of your account payments are still being made on time.
Even if you are never late, you can have poor credit scores because your overall credit use demonstrates high lending risk. In most of the instances I see where there are no late payments, the individual has stretched their credit use to the limits.
While they may not have been late yet, they are on the verge of disaster and likely are spending more than they make. Because they have used all of their available credit, they no longer have room for any unexpected financial issues. It their car breaks down, their child gets sick, or they have some other unforeseen expense, they won't be able to repay their debts.
That is why using all of your available credit on any account, including a home equity line of credit, can have a negative impact on credit scores. The more "maxed out" accounts you have, the more serious the impact on your credit scores.
Thanks for asking.
The "Ask Experian" team