What Credit Score Do You Need for a HELOC?

A [Home Equity Line of Credit](/blog/best-heloc-lenders-2026) (HELOC) can be a powerful financial tool, offering flexible access to your home's equity for renovations, debt consolidation, or major expenses. But before you can tap into this resource, you need to meet specific credit requirements that vary by lender and loan type.

Understanding [HELOC credit score](/blog/heloc-credit-score-requirements-2026) requirements is crucial for homeowners looking to leverage their property's value. In this comprehensive guide, we'll explore exactly what credit score you need, how different score ranges affect your options, and strategies to improve your chances of approval.

Minimum Credit Score Requirements for HELOCs

Standard HELOC Requirements

Most traditional lenders require a minimum credit score of 620-640 for HELOC approval. However, this baseline requirement doesn't tell the whole story. Your credit score significantly impacts:

• Interest rates: Higher scores secure lower rates
• Credit limits: Better scores unlock higher borrowing limits
• Loan-to-value ratios: Top-tier scores allow more aggressive LTV ratios
• Approval speed: Excellent credit expedites the process

[Credit Score Tiers](/blog/credit-score-ranges-explained) and What They Mean

Excellent Credit (740+)

• Access to the best interest rates (often 2-3% lower than average)
• Maximum LTV ratios (up to 85-90% in some cases)
• Minimal documentation requirements
• Potential for higher credit limits
• Negotiating power with lenders

Good Credit (680-739)

• Competitive interest rates
• Standard LTV ratios (typically up to 80%)
• Straightforward approval process
• Good selection of lender options
• Reasonable terms and conditions

Fair Credit (620-679)

• Higher interest rates (1-2% above prime offers)
• More conservative LTV ratios (65-75%)
• Additional documentation may be required
• Limited lender options
• Potentially higher fees

Below 620

• Traditional HELOCs very difficult to obtain
• May need to explore alternative options
• Significantly higher costs if approved
• Consider improving credit before applying

Beyond Credit Score: Other HELOC Requirements

[Debt-to-Income Ratio](/blog/dti-ratio-explained) (DTI)

Lenders typically require a DTI ratio of 43% or lower, though some may accept up to 50% with exceptional credit. Your DTI includes:

• Existing mortgage payments
• Proposed HELOC payment
• Credit card minimum payments
• Auto loans and student loans
• Other recurring debt obligations

Home Equity Requirements

You need substantial equity in your home. Most lenders require:

• Minimum 15-20% equity remaining after the HELOC
• Combined Loan-to-Value (CLTV) ratio of 80-90% maximum
• Recent home appraisal confirming current value

Example: If your home is worth $400,000 with a $200,000 mortgage, you have $200,000 in equity (50% LTV). With an 80% CLTV limit, you could potentially access up to $120,000 ($400,000 × 80% = $320,000 maximum debt - $200,000 existing mortgage).

Income Verification

Lenders need proof of stable, sufficient income:

• Recent pay stubs (last 30-60 days)
• W-2 forms or tax returns (past 2 years)
• Bank statements showing deposit history
• Additional income documentation (rental income, retirement, etc.)

Employment History

Most lenders prefer:

• Minimum 2 years with current employer or in the same field
• Stable employment history without gaps
• Consistent or increasing income trajectory

How Credit Scores Affect [HELOC Interest Rates](/blog/heloc-interest-rates-explained)

Your credit score directly impacts the interest rate you'll pay, which can mean thousands of dollars difference over the life of your HELOC.

2026 Rate Examples by Credit Score

740+ Credit Score

• Prime rate + 0.5-1.0%
• Example: 7.5-8.0% APR (assuming 7% prime rate)

680-739 Credit Score

• Prime rate + 1.0-2.0%
• Example: 8.0-9.0% APR

620-679 Credit Score

• Prime rate + 2.0-3.5%
• Example: 9.0-10.5% APR

Cost Impact Example: On a $50,000 HELOC over 10 years:

• At 7.5% APR: ~$20,400 in interest
• At 10.5% APR: ~$29,500 in interest
• Difference: $9,100 more paid with lower credit

Strategies to Improve Your HELOC Approval Chances

Before You Apply

1. Check Your Credit Reports

• Review all three credit bureaus (Equifax, Experian, TransUnion)
• Dispute any errors or inaccuracies
• Understand what's impacting your score

2. Improve Your Credit Score

• Pay down credit card balances below 30% utilization
• Make all payments on time for at least 6-12 months
• Don't close old credit accounts
• Avoid new credit applications before applying

3. Reduce Your DTI

• Pay down existing debts
• Increase income through side work or raises
• Consider paying off smaller loans completely

4. Build More Equity

• Make extra mortgage payments
• Complete [home improvements that add value](/blog/best-renovations-for-value)
• Wait for natural home appreciation

During Application

1. Shop Multiple Lenders

• Credit unions often have more flexible requirements
• Online lenders may offer competitive rates
• Local banks may value existing relationships

2. Prepare Documentation

• Organize all financial documents in advance
• Provide complete, accurate information
• Respond quickly to lender requests

3. Consider a Co-Borrower

• Adding someone with stronger credit can help
• Both parties will be equally responsible
• Can improve overall application strength

Alternative Options If You Don't Qualify

Home Equity Loan

Fixed-rate loans may have slightly different requirements:

• Often similar credit score minimums
• Predictable payments
• May be easier to qualify for smaller amounts

[Cash-Out Refinance](/blog/cash-out-refinance-guide)

Refinancing your entire mortgage to access equity:

• Typically requires 620+ credit score
• Can consolidate first mortgage and cash-out
• May offer better rates in some scenarios

Personal Loan

Unsecured personal loans:

• No home equity required
• Generally need 640+ credit score
• Higher interest rates but faster process

Working on Credit First

Sometimes the best option is waiting:

• Spend 6-12 months improving credit
• Pay down debts strategically
• Build stronger financial profile
• Qualify for better terms later

Special Considerations in 2026

Economic Factors

Current market conditions affecting HELOCs:

• Federal Reserve rate policies impact HELOC rates
• Home values in your area affect available equity
• Lender competition may create opportunities

Regulatory Changes

Recent updates to lending standards:

• Enhanced verification requirements
• Updated appraisal processes
• Consumer protection enhancements

Technology Improvements

Modern HELOC applications:

• Faster pre-approval processes
• Digital documentation submission
• Real-time rate quotes
• Automated underwriting for strong applicants

Frequently Asked Questions

What's the absolute minimum credit score for a HELOC?

While some lenders may approve HELOCs with scores as low as 600, the industry standard minimum is 620-640. Below this threshold, you'll face significant challenges securing approval and will pay substantially higher rates if approved.

Can I get a HELOC with a 650 credit score?

Yes, a 650 credit score typically qualifies you for a HELOC, though you won't receive the best rates. You'll likely face interest rates 1.5-2.5% higher than borrowers with excellent credit. Focus on having strong income, low DTI, and substantial equity to strengthen your application.

How much does credit score affect HELOC interest rates?

Credit score has a massive impact on HELOC rates. The difference between fair credit (650) and excellent credit (760+) can be 2-3 percentage points, translating to thousands of dollars in additional interest over the life of the loan.

Will applying for a HELOC hurt my credit score?

The initial credit inquiry may lower your score by 3-5 points temporarily. However, if you shop multiple lenders within a 14-45 day window, these inquiries typically count as a single inquiry. Once approved, responsible HELOC management can actually improve your credit over time.

Do all three credit scores need to meet the minimum?

Most lenders pull all three credit scores and use the middle score for qualification purposes. If you have scores of 640, 660, and 680, they'll likely use 660. This makes it important to check all three bureaus before applying.

How long does it take to get approved for a HELOC?

With good credit (700+) and organized documentation, HELOC approval can take 2-4 weeks. Lower credit scores may extend this timeline as lenders conduct more thorough reviews. Some lenders now offer expedited approval in as little as 7-10 days for exceptional applicants.

Can I improve my credit score while my HELOC application is pending?

While you shouldn't make major credit changes during underwriting, paying down credit card balances can help. Avoid opening new accounts, making large purchases, or changing jobs during the application process.

Are credit requirements stricter for larger HELOC amounts?

Yes, lenders typically apply stricter standards for larger credit lines. A $100,000 HELOC will face more scrutiny than a $25,000 line, often requiring higher credit scores and lower DTI ratios.

Conclusion: Positioning Yourself for HELOC Success

Getting approved for a HELOC with favorable terms requires more than just meeting the minimum credit score requirement. While 620-640 may get you in the door, aiming for 740+ will unlock the best rates and terms, potentially saving you thousands of dollars.

Before applying, take time to review your complete financial picture. Check your credit reports for errors, work on improving your score if needed, and ensure you have substantial home equity and manageable debt levels. Shopping multiple lenders and preparing thorough documentation will streamline the process.

Remember, if you don't currently qualify for competitive HELOC terms, spending several months improving your credit profile often pays significant dividends through lower rates and better loan terms. Your home equity isn't going anywhere, and patience can result in substantially better financial outcomes.

Whether you're planning a major renovation, consolidating high-interest debt, or building an emergency fund, understanding [HELOC credit requirements](/blog/heloc-credit-score-requirements) positions you to make informed decisions and secure the best possible terms for your financial situation.

Related Articles

• HELOC Credit Score Requirements for 2026: What You Need to Qualify
• HELOC Credit Score Requirements: What You Need in 2026
• HELOC Interest Rates Explained: Everything You Need to Know in 2026