HELOC Credit Score Requirements for 2026: What You Need to Qualify

Most lenders require a credit score of 620-640 to qualify for a HELOC in 2026, but your score heavily influences your interest rate and credit line amount. A 680 score might get you approved, while a 740 score gets you approved with a rate 0.5-1% lower.

Minimum Credit Score by Lender Type

Different lenders have different minimum requirements:

Major Banks (680-720 Minimum)

Large national banks like Chase, Bank of America, Wells Fargo, and U.S. Bank typically require higher credit scores.

Typical minimum: 680-700 for approval, 720+ for best rates

Why higher: These banks focus on lower-risk borrowers and can afford to be selective. They have abundant capital and don't need to take on marginal credit risk.

Advantages if you qualify:

• Competitive rates for high credit scores
• Relationship discounts if you have other accounts
• Streamlined process with existing customers
• Large credit lines available ($250,000+)

Who should apply: Borrowers with 700+ credit scores, stable employment, and low debt-to-income ratios.

Credit Unions (640-680 Minimum)

Credit unions often have more flexible requirements than major banks.

Typical minimum: 640-680 for approval, 700+ for best rates

Why more flexible: Credit unions focus on member relationships rather than pure profit. Many consider factors beyond credit scores, including employment history, account history with the credit union, and overall financial picture.

Advantages:

• Lower minimum credit requirements
• More willing to consider explanations for past credit issues
• Often lower rates than banks for the same credit score
• Relationship-based underwriting

Who should apply: Borrowers with 640-700 credit scores, existing credit union members, or those with solid financial profiles despite moderate credit scores.

Online Lenders (620-660 Minimum)

Online-only lenders like Figure, Rocket Mortgage, and LendingTree partners often have the most flexible credit requirements.

Typical minimum: 620-660 for approval, varies widely for best rates

Why most flexible: Online lenders use automated underwriting and have lower overhead costs. They compete on accessibility and speed rather than just rates.

Advantages:

• Lowest minimum credit scores
• Fast approval (sometimes 1-2 weeks)
• Fully online process
• More willing to work with non-traditional credit profiles

Disadvantages:

• Rates may be higher for moderate credit scores
• Less personal service
• May have higher fees
• Credit line limits sometimes lower ($100,000-$150,000 max)

Who should apply: Borrowers with 620-680 credit scores who have difficulty qualifying with traditional lenders.

How Credit Scores Affect Interest Rates

Your credit score directly impacts your interest rate, which significantly affects your total cost.

Credit Score Tiers and Typical Rates (2026):

*Based on Prime Rate of 7.5% in early 2026

Real cost difference:

On a $100,000 HELOC with a 10-year draw period:

• 760+ score at 8%: ~$8,000/year in interest (interest-only payments)
• 680 score at 9%: ~$9,000/year in interest
• 640 score at 10%: ~$10,000/year in interest

The difference between a 760 and 640 credit score costs $2,000 per year, or $20,000 over 10 years on a $100,000 balance.

Factors Beyond Credit Score

Lenders consider multiple factors, not just your credit score.

Debt-to-Income Ratio (DTI)

Your DTI compares monthly debt payments to gross monthly income.

Formula: (Total monthly debt payments ÷ Gross monthly income) × 100

Example: You earn $8,000/month gross and have:

• Mortgage: $1,800
• Car payment: $400
• Student loans: $250
• Credit cards: $150
• Total: $2,600

DTI = ($2,600 ÷ $8,000) × 100 = 32.5%

HELOC impact: Lenders add your estimated HELOC payment to this calculation. If your $100,000 HELOC has a 9% rate, interest-only payments are ~$750/month. New DTI: ($3,350 ÷ $8,000) = 41.9%

DTI limits:

• Under 36%: Excellent. Most lenders approve easily.
• 36-43%: Good. Most lenders approve with decent credit scores.
• 43-50%: Fair. Some lenders approve, especially with 700+ credit scores and substantial equity.
• Over 50%: Difficult. Few lenders approve except with exceptional credit (760+) and high equity.

Lower credit scores need lower DTI: If your credit score is 640-680, most lenders want DTI under 40%. If your score is 720+, they may accept DTI up to 50%.

Combined Loan-to-Value Ratio (CLTV)

CLTV measures total debt against your home's value.

Formula: (Mortgage balance + HELOC amount) ÷ Home value

Example: Home worth $400,000, mortgage of $200,000, requesting $100,000 HELOC:

• CLTV = ($200,000 + $100,000) ÷ $400,000 = 75%

CLTV limits by credit score:

Lower credit scores require more equity: A 640 credit score might only qualify for 75-80% CLTV, meaning you need to maintain 20-25% equity. A 760 score might access up to 90% CLTV, keeping only 10% equity.

Using the example above, the same borrower with a 640 score and 80% max CLTV could only get an $80,000 HELOC instead of $100,000.

Income Stability

Lenders prefer stable, verifiable income.

Strong profiles:

• W-2 employee with 2+ years at current job or in same field
• Consistent income with regular raises
• Multiple income sources (job + rental income + investments)

Challenging profiles:

• Self-employed less than 2 years
• Commissioned income with high variability
• Recent job changes (less than 6 months)
• Income gaps in the past 2 years

Credit score interaction: Lower credit scores require more income stability. If you have a 650 score and switched jobs 3 months ago, approval is harder than with a 720 score and the same job history.

Payment History

Your credit score reflects payment history, but lenders also review it directly.

What helps:

• No late payments in past 12-24 months
• No missed payments ever on mortgages or auto loans
• Long history of on-time payments

What hurts:

• Late mortgage payments in past 12 months (major red flag)
• Recent late payments (past 6 months) on any accounts
• Collections, charge-offs, or judgments (past 2-3 years)
• Bankruptcy or foreclosure (past 7-10 years)

Mortgage late payments are critical: A late payment on your current mortgage in the past year often results in automatic denial, regardless of credit score. Lenders view this as a direct indicator of risk for home-secured debt.

Improving Your Approval Odds with Lower Credit

If your score is 620-680, these strategies increase approval chances:

Pay Down Credit Card Balances

Credit utilization (balance ÷ credit limit) accounts for 30% of your FICO score.

High impact: Reduce credit card balances below 30% of limits. Under 10% is ideal.

Example: You have three credit cards:

• Card 1: $8,000 balance, $10,000 limit (80% utilization)
• Card 2: $3,000 balance, $5,000 limit (60% utilization)
• Card 3: $500 balance, $5,000 limit (10% utilization)
• Total: $11,500 balance, $20,000 limits (57.5% utilization)

Paying down $5,500 to reach $6,000 total balance drops utilization to 30%, potentially increasing your score 20-40 points within 1-2 months.

Fix Credit Report Errors

25% of credit reports contain errors that could affect scores.

Common errors:

• Accounts that aren't yours
• Incorrect late payments
• Paid collections still showing as open
• Incorrect credit limits (lowering limits inflates utilization)
• Duplicate accounts

How to fix:

1. Get free credit reports from all three bureaus at annualcreditreport.com
2. Review every account, balance, and payment history
3. Dispute errors through each bureau's website or by mail
4. Follow up every 30 days until corrected

Corrections can improve scores within 30-60 days.

Add Positive Payment History

If you have limited credit history or recent negative items, add positive payment history.

Strategies:

• Become an authorized user on someone else's card with perfect payment history (usually a parent or spouse)
• Open a secured credit card and use it for small purchases, paying in full monthly
• Request credit limit increases on existing cards (lowers utilization without paying down balances)

Timeline: New positive history improves scores over 3-6 months.

Wait for Negative Items to Age

Negative items impact your score less as they age.

Impact decay:

• Late payments: Maximum impact for 6-12 months, decreasing impact over 24 months, minimal impact after 3-4 years
• Collections: Heavy impact when fresh, moderate impact after 2 years, minimal after 4+ years
• Bankruptcy: Severe impact for 2-3 years, moderate impact for 4-7 years, removed after 10 years

If you have a 640 score primarily due to issues from 2-3 years ago with perfect payments since, waiting 6-12 more months could boost your score to 680-700, significantly improving your HELOC terms.

Lower Your DTI

Since lower credit scores require lower DTI, reducing monthly debt payments helps.

Strategies:

• Pay off small debts completely (eliminates monthly payments from DTI)
• Refinance high-interest debt to lower payments
• Consolidate multiple payments into one lower payment
• Increase income (get a raise, add a side job, add rental income)

High impact example: Paying off a $300/month car loan when you earn $6,000/month drops DTI by 5 percentage points. This could make the difference between approval and denial with a 660 credit score.

Build More Home Equity

More equity means lower CLTV, which partially offsets lower credit scores.

Strategies:

• Make extra principal payments on your mortgage
• Wait for property appreciation (if in a rising market)
• Complete home improvements that add value

Example: If your credit score is 650 and you request 80% CLTV, approval is challenging. Reducing your request to 70% CLTV (leaving 30% equity) significantly improves odds.

On a $400,000 home with a $200,000 mortgage:

• 80% CLTV: $120,000 HELOC (challenging with 650 score)
• 70% CLTV: $80,000 HELOC (much more likely with 650 score)

If you can work with a smaller credit line, you increase approval chances.

Alternative Options for Credit Scores Below 620

If your credit score is below 620, traditional HELOCs are difficult to obtain. Consider these alternatives:

Home Equity Loan Instead of HELOC

Home equity loans (fixed amount, fixed rate, closed-end) sometimes have more flexible credit requirements than HELOCs (revolving credit line).

Some lenders approve home equity loans with scores as low as 600-620, especially if you:

• Have substantial equity (CLTV under 70%)
• Need a specific amount for a defined purpose
• Have stable income and low DTI

Rates are typically higher with lower credit, but approval odds are better.

FHA Cash-Out Refinance

If you have less than 20% equity but need cash, an FHA cash-out refinance allows credit scores as low as 580-600.

Requirements:

• Minimum 580 credit score (some lenders require 600-620)
• Maximum 80% CLTV on cash-out
• Property must be primary residence
• Mortgage insurance required

This replaces your current mortgage with a larger one and gives you cash. Monthly payments increase, but it provides access to equity with lower credit scores.

Co-Signer or Co-Borrower

Adding someone with strong credit as a co-borrower improves approval odds and potentially lowers rates.

Requirements:

• Co-borrower must consent to full liability for the debt
• Both incomes and credit are considered
• Both names go on the HELOC

Best candidates: Spouse, partner, or family member with 700+ credit score and willingness to take on the obligation.

Rebuild Credit First

If you don't urgently need funds, spending 6-12 months rebuilding credit could save thousands in interest and improve approval odds dramatically.

6-month improvement plan:

1. Pay all bills on time (set up autopay)
2. Pay down credit cards below 30% utilization
3. Dispute credit report errors
4. Don't apply for new credit (avoid hard inquiries)
5. Become an authorized user on someone's excellent credit account

Following this plan strictly could improve a 600 score to 640-660, or a 660 score to 700+, significantly changing your HELOC options.

What Lenders See Beyond the Score

Credit scores are algorithms. Lenders review your full credit report and see details the score doesn't reveal.

Positive factors that help despite moderate scores:

• Perfect mortgage payment history (even if other debts had issues)
• Explanable credit issues (medical debt, divorce, temporary job loss) with recovery
• Strong recent history (past 12-24 months perfect) despite older issues
• Substantial equity and low CLTV
• High income and low DTI

Negative factors that hurt despite decent scores:

• Recent late mortgage payments
• Maxed-out credit cards (even if paying minimums on time)
• Recent collections or judgments
• Multiple recent credit applications
• High DTI even with on-time payments

Some borrowers with 680 scores get denied while others with 650 scores get approved, depending on these underlying factors.

Credit Score Timing: When to Apply

Don't apply immediately after negative events:

• Wait at least 1-2 months after large credit utilization spikes
• Wait 30-60 days after hard credit inquiries
• Wait until errors are corrected (disputes in progress freeze applications)

Best timing:

• After paying down credit cards (wait for the next statement cycle to post, then 30 days for score updates)
• After several months of perfect payment history following past issues
• When your credit report shows the positive changes you've made

Score update frequency: Credit scores update monthly when creditors report to bureaus. Most report between the 1st and 15th of each month. If you pay down debt on the 20th, it won't reflect in your score until the next month's reporting cycle.

Multiple Applications: Impact on Credit

Each HELOC application triggers a hard inquiry, dropping your score 2-5 points temporarily.

Rate shopping protection: Credit scoring models allow rate shopping. Multiple HELOC inquiries within 14-45 days (depending on the scoring model) count as one inquiry for score purposes.

Strategy: Identify 3-5 lenders, then apply with all of them within a 2-week window. This minimizes score impact while maximizing your chances of finding the best rate and terms.

Avoid: Applying with one lender, waiting 2 months, applying with another, waiting again. Each application drops your score and the damage stacks.

How Lenders Calculate Risk

Understanding lender perspective helps you present the strongest application.

Low risk (easy approval, best rates):

• 740+ credit score
• DTI under 35%
• CLTV under 70%
• Perfect payment history past 2 years
• Stable W-2 income

Medium risk (approval likely, moderate rates):

• 680-739 credit score
• DTI 35-43%
• CLTV 70-80%
• No late payments past 12 months
• Stable income with minor issues

High risk (approval challenging, higher rates if approved):

• 620-679 credit score
• DTI over 43%
• CLTV over 80%
• Some late payments or collections in past 2 years
• Income volatility or recent changes

Position yourself as far into the "low risk" category as possible before applying.

Bottom Line

Most borrowers need at least a 640 credit score for realistic HELOC approval in 2026, with 680+ opening significantly better rates and terms. Scores below 640 face limited options and higher costs.

Every 20-40 points in credit score improvement can save 0.25-0.5% on your interest rate—thousands of dollars over time on a substantial HELOC balance.

If your score is borderline (620-680), improve it before applying: pay down debt, fix errors, and build positive payment history for 3-6 months. The rate savings and improved approval odds outweigh the waiting period.

If your score is strong (700+), shop aggressively for the best rate. The difference between lenders can be 0.5-1% even with identical credit profiles—$500-$1,000 per year on a $100,000 HELOC.

Know your score, understand what lenders see, and position yourself as the lowest-risk borrower possible. The effort pays off in lower costs and better terms.