HELOC Credit Score Requirements: What You Need in 2026

Your credit score is one of the most critical factors in HELOC approval and determines not just whether you'll qualify, but also what interest rate you'll pay. The difference between a 680 and 760 credit score can mean 1-2% higher rates—costing thousands of dollars over the life of your HELOC.

This comprehensive guide breaks down exactly what credit score you need for a HELOC in 2026, how scores affect your terms, and proven strategies to improve your approval odds if your credit isn't perfect.

Minimum Credit Score for a HELOC

Industry Standard Requirements

General minimums across most lenders in 2026:

Hard minimums:

• Most banks and online lenders: 660-680
• Credit unions: 640-660
• Subprime lenders: 620 (rare, very expensive)
• Industry average: 660-680

Lender-Specific Requirements

Major banks (Wells Fargo, Bank of America, Chase):

• Minimum: 680-700
• Preferred: 720+
• Premium rates: 760+

Credit unions:

• Minimum: 640-660
• More flexible with members
• Consider full financial picture, not just score

Online lenders (SoFi, Figure, Upgrade):

• Minimum: 660-680
• Algorithm-driven approval
• Less flexibility for borderline cases

[Portfolio lenders](/blog/portfolio-lending-guide) (smaller community banks):

• Minimum: 640-680
• May consider compensating factors
• Relationship matters

How Credit Scores Affect Your HELOC Rate

Your credit score directly impacts your interest rate margin (the amount added to the Prime Rate):

Rate Tiers by Credit Score (2026)

Assuming Prime Rate at 7.50%:

Real cost difference:

A borrower with 760 credit vs. 660 credit, both with $75,000 HELOC:

• 760 score: 8.25% rate = $516/month interest
• 660 score: 10.00% rate = $625/month interest
• Difference: $109/month = $1,308/year = $13,080 over 10 years

This illustrates why improving your credit score before applying is so valuable.

Beyond Credit Score: Other HELOC Requirements

Credit score is critical, but lenders evaluate multiple factors:

1. Loan-to-Value (LTV) Ratio

Maximum combined LTV (your mortgage + HELOC as percentage of [home value](/blog/appraisal-process-explained)):

• Most lenders: 80-85% maximum
• Conservative lenders: 75-80% maximum
• Aggressive lenders: 90% maximum (rare, requires excellent credit)

Impact on credit requirements:

• Low LTV (under 60%): May qualify with lower credit score
• High LTV (over 80%): Need higher credit score

Example: Home value: $500,000

• 70% CLTV: $350,000 max debt, might approve at 660 credit
• 85% CLTV: $425,000 max debt, probably need 700+ credit

2. Debt-to-Income (DTI) Ratio

Maximum DTI ratios:

• Front-end DTI (housing only): 28-35%
• Back-end DTI (all debt): 43-50%
• Preferred: Under 36% back-end

How it's calculated: (Total Monthly Debt Payments ÷ Gross Monthly Income) × 100

Example:

• Gross monthly income: $8,000
• Mortgage payment: $1,800
• Car payment: $400
• Credit cards minimum: $200
• Proposed HELOC payment: $450
• Total debt: $2,850
• DTI: ($2,850 ÷ $8,000) × 100 = 35.6% ✓ Acceptable

Impact on credit requirements:

• Low DTI (under 30%): More flexibility on credit score
• High DTI (over 40%): Need stronger credit score to compensate

3. Home Equity Amount

Minimum equity requirements:

• Absolute minimum: 10-15% equity (85-90% CLTV)
• Typical minimum: 15-20% equity (80-85% CLTV)
• Preferred: 25%+ equity (75% CLTV or lower)

Higher equity = easier approval with lower credit score

4. Income Verification

Requirements:

• Steady employment (2 years preferred)
• Sufficient income to afford payments
• Documented via pay stubs, W-2s, tax returns
• Self-employed need 2 years tax returns

Impact on credit requirements:

• Strong, stable income: Compensates for borderline credit
• Variable or recent income: Need stronger credit score

5. Payment History

Lenders scrutinize your payment history, especially:

• Mortgage payments: Must be current, preferably no late payments in 12-24 months
• Recent late payments: Even one 30-day late payment in past 12 months can hurt
• Charge-offs or collections: Major red flags, may require explanation

Critical: Perfect mortgage payment history in the past 12 months is often more important than your overall credit score.

Credit Score Components and HELOC Impact

Understanding what affects your credit score helps you improve it:

FICO Score Breakdown

What Helps Your [HELOC Application](/blog/heloc-application-process-step-by-step)

✓ Perfect payment history: Especially on mortgage and major loans ✓ Low credit utilization: Under 30% on credit cards, under 10% is ideal ✓ Long credit history: Average account age 7+ years ✓ Mix of credit types: Mortgage, installment loans, credit cards ✓ Minimal recent inquiries: Under 3 in past 6 months

What Hurts Your HELOC Application

✗ Late payments: Especially within past 12 months ✗ High credit card balances: Above 50% utilization ✗ Recent bankruptcies: Within 4-7 years ✗ Foreclosures: Within 3-7 years ✗ Collections or charge-offs: Especially unpaid ✗ Multiple recent credit inquiries: Appears desperate for credit ✗ Short credit history: Under 3 years total ✗ Closed accounts: Reduces total available credit

Special Situations and Credit Requirements

Recent Bankruptcy

Chapter 7 bankruptcy:

• Minimum wait: 4 years (FHA standards)
• Typical wait: 5-7 years for conventional HELOC
• With extenuating circumstances: Sometimes 2-4 years
• Need: Re-established credit, perfect payment history since discharge

Chapter 13 bankruptcy:

• During repayment: Usually cannot get HELOC
• After discharge: 2-4 years typically
• With court permission during Ch. 13: Very rare, requires trustee approval

Credit score requirement: Usually 680+ even after waiting period

Recent Foreclosure or Short Sale

Foreclosure:

• Minimum wait: 5-7 years
• Credit score requirement: 680-700+
• Must demonstrate financial rehabilitation

Short sale:

• Minimum wait: 2-4 years
• Slightly easier than foreclosure
• Credit score requirement: 660-680+

Deed in lieu:

• Minimum wait: 4 years
• Similar to foreclosure treatment

Self-Employed Borrowers

Additional requirements:

• 2 years tax returns
• Business financials
• Proof of business continuity
• May need higher credit score: 680-700+

Why harder: Income verification is more complex, lenders view as higher risk

Recent Credit Inquiries

Hard inquiries (credit applications):

• Each inquiry: -3 to -5 points temporarily
• Impact fades after 6 months
• Removed after 2 years

[Mortgage shopping](/blog/how-to-get-lowest-mortgage-rate) exception: Multiple mortgage inquiries within 45 days count as one

Ideal: Under 2-3 inquiries in past 6 months

Joint Applications

Applying with co-applicant (spouse, partner):

• Lenders use lower middle score of all applicants
• Income from both counts toward qualification
• Debt from both counts toward DTI

Example:

• Applicant 1: 720 credit score
• Applicant 2: 680 credit score
• Lender uses: 680 (the lower score)

Strategy: If one spouse has significantly lower score, consider solo application (if income sufficient)

How to Improve Your Credit Score for HELOC Approval

3-Month Quick Improvement Plan

Month 1 - Immediate Actions:

1. Pay down credit card balances below 30% (below 10% is better)

   • Biggest impact on score
   • Can increase score 20-40+ points

2. Become authorized user on someone's excellent credit card

   • Their positive history may report to your credit
   • Choose account with long history, low utilization

3. Dispute credit report errors

   • Get free reports at AnnualCreditReport.com
   • Challenge any inaccuracies
   • Can increase score 10-30+ points if errors removed

4. Pay all bills on time

   • Set up autopay
   • Even small late payments hurt

Month 2 - Strategic Improvements:

1. Request credit limit increases

   • Call credit card companies
   • Don't use the new limit (improves utilization)
   • Can improve score 10-20 points

2. Don't close old accounts

   • Reduces available credit
   • Shortens credit history
   • Can drop score 20-30 points

3. Pay down installment loans

   • Shows payment progress
   • Improves DTI for HELOC application

Month 3 - Fine-Tuning:

1. Avoid new credit applications

   • Each hard inquiry costs a few points
   • Let recent inquiries age

2. Optimize credit card timing

   • Pay before statement closing date
   • Reports lower balance to bureaus

3. Review credit reports again

   • Ensure dispute corrections processed
   • Verify all payments reporting correctly

Expected improvement: 20-60+ points over 3 months (depending on starting point)

6-12 Month Strategic Improvement Plan

For more significant credit challenges:

1. Pay off collections (strategically)

   • Negotiate "pay for delete" if possible
   • Get agreement in writing before paying
   • Focus on newest collections first

2. Settle charge-offs

   • Negotiate settlement for less than full amount
   • Get "paid in full" or "settled" status
   • Document everything

3. Establish new positive tradelines

   • Secured credit card if needed
   • Credit-builder loan
   • Timely payments for 6-12 months

4. Increase credit history

   • Keep old accounts open and active (small purchases, paid in full)
   • Don't churn credit cards

5. Diversify credit mix

   • If you only have credit cards, consider installment loan
   • If only installment loans, consider credit card

Expected improvement: 50-120+ points over 6-12 months

Alternative Options for Lower Credit Scores

If your credit score doesn't qualify for traditional HELOC:

1. [Home Equity Loan](/blog/best-heloc-lenders-2026) Instead of HELOC

Why it may be easier:

• Fixed amount, less risky for lender
• Slightly more flexible credit requirements
• May qualify at 640-660 instead of 680+

2. Co-Signer or Co-Applicant

How it works:

• Someone with better credit co-signs
• Their credit and income count toward approval
• Both parties equally responsible

Risks: Damages both credit scores if payments missed

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

Requirements:

• Minimum 580 credit score (some lenders want 600-620)
• More flexible than HELOC
• Replaces existing mortgage

Drawbacks: Mortgage insurance required, higher total debt

4. Credit Union Membership

Benefits:

• Often more flexible than banks
• Consider full financial picture
• May approve 620-640 credit with compensating factors

Requirements: Must qualify for membership

5. Wait and Improve Credit

Best long-term strategy:

• Spend 3-12 months improving credit
• Save for lower LTV
• Get better rate, save thousands

When to wait: If you can delay application, this is often the smartest choice

HELOC Pre-Qualification vs. Pre-Approval

Pre-Qualification

What it is: Soft inquiry, informal estimate Credit impact: None (soft pull) Accuracy: Rough estimate only Time: Minutes Best for: Shopping around

Pre-Approval

What it is: Full application, hard credit pull Credit impact: Hard inquiry (-3 to -5 points) Accuracy: Firm commitment (subject to verification) Time: 1-7 days Best for: When you've chosen lender

Strategy: Get pre-qualified with multiple lenders (no credit impact), then get pre-approved with your top choice.

Frequently Asked Questions

What credit score do I need for a $100,000 HELOC?

Larger HELOCs sometimes require higher credit scores. For $100,000+, most lenders want:

• Minimum: 680-700
• Competitive rates: 720+
• Best rates: 760+

The higher loan amount represents more risk, so lenders are more conservative.

Can I get a HELOC with a 650 credit score?

Possible, but challenging. Credit unions are your best bet at this score. Expect:

• Higher interest rates (2-3% above prime)
• Lower loan-to-value limits (70-75%)
• More documentation requirements
• Potentially higher fees

Consider improving score to 680+ before applying to save significantly on rates.

Do all three credit scores need to be above the minimum?

Lenders typically use your middle score (median of the three bureau scores):

• Experian: 690
• TransUnion: 710
• Equifax: 680
• Lender uses: 690 (the middle)

For joint applications, lenders use the lower applicant's middle score.

Will applying for a HELOC hurt my credit score?

Pre-qualification: No impact (soft pull) Formal application: Small impact (hard pull, -3 to -5 points) Multiple HELOC inquiries within 45 days: Usually counted as one

The inquiry impact is temporary (6-12 months) and minimal compared to potential benefits of the HELOC.

How much can I improve my credit score in 30 days?

Realistic improvement in 30 days: 10-40 points

Fast actions:

• Pay down credit card balances below 30% (biggest impact)
• Dispute errors
• Become authorized user on excellent account
• Pay all bills on time

Not realistic in 30 days:

• Removing accurate negative items (late payments, collections)
• Building long credit history
• Major credit rehabilitation

Does checking my own credit score hurt it?

No. Soft inquiries (checking your own credit) don't affect your score. Check regularly using:

• AnnualCreditReport.com (free official reports)
• Credit Karma (free scores)
• Your credit card issuer (many offer free scores)

Will paying off my credit cards completely improve my score?

Yes, dramatically—if you're carrying high balances. But:

Ideal strategy: Pay down to under 10% utilization, not necessarily zero Why: Small balances show active credit use Example: $1,000 limit, keep $50-$100 balance (5-10%), pay in full after statement

Exception: If in debt, pay to zero and stay there.

How long do late payments affect my HELOC eligibility?

Impact timeline:

• 0-12 months old: Very significant impact, may deny approval
• 12-24 months old: Moderate impact, may increase rates
• 24-36 months old: Minor impact
• 36+ months old: Minimal impact (but still on report for 7 years)

Mortgage late payments are viewed most seriously. Even one 30-day late in the past year can result in denial.

Ready to Apply for a HELOC?

Understanding credit requirements helps you prepare, improve your odds, and secure the best possible rate. Whether your credit is excellent or needs improvement, knowing where you stand is the first step toward accessing your home equity.

At HonestCasa, we work with a range of credit profiles and provide clear guidance on your approval odds. See if you qualify and get your personalized rate today.

Get Started Today →

Check your rate in minutes without impacting your credit score.

Related Articles

• HELOC Credit Score Requirements for 2026: What You Need to Qualify
• [[Home [Equity Explained](/blog/home-equity-explained)](/blog/what-is-home-equity): What It Is and How to Build It](/blog/home-equity-explained)
• Blended Family Home Planning: Merging Households and Managing Home Equity