Can You Get a HELOC with Bad Credit? Requirements + Options

Quick answer: Yes, but it's harder. Most lenders want a credit score of 680+, though some will go as low as 620—or even 580 with strong compensating factors. Here's what you need to know.

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What Credit Score Do You Need for a HELOC?

Every lender sets their own requirements, but here's the general breakdown:

The sweet spot: 680+ gives you the most options and best terms. Below that, you'll pay more and have fewer choices.

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What Counts as "Bad Credit"?

Credit scores fall into ranges. Here's how FICO categorizes them:

• 800-850: Exceptional
• 740-799: Very Good
• 670-739: Good
• 580-669: Fair (most lenders consider this "bad")
• Below 580: Poor

In the HELOC world, anything below 680 starts limiting your options. Below 620, you're in challenging territory. Below 580, most traditional lenders won't work with you.

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How Bad Credit Affects Your HELOC Terms

Even if you get approved with a lower score, expect these differences:

Higher Interest Rates

A borrower with a 750 score might get 7.25%. With a 620 score, you might pay 9-10% for the same credit line. That's $150-200 more per month on a $100,000 HELOC.

Lower Loan-to-Value (LTV)

Strong credit borrowers can often access 80-85% of their equity. With lower scores, lenders cap you at 65-70%. Less equity available = smaller credit line.

More Documentation Required

Expect lenders to scrutinize your finances more closely:

• 2+ years of tax returns
• Bank statements for 3-6 months
• Explanations for any credit issues
• Proof of income stability

Longer Approval Timeline

Where a strong applicant might close in 2-3 weeks, lower credit scores often mean 4-6 weeks due to additional underwriting review.

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Options If Your Credit Is Below 620

Don't give up. Here are realistic paths forward:

1. Find Lenders Who Specialize in Lower Scores

Some credit unions and online lenders work with borrowers in the 580-620 range. They focus more on:

• Your equity cushion (more equity = less risk)
• Income stability (steady job history helps)
• Low debt-to-income ratio (under 43%)

2. Apply with a Co-Borrower

A spouse, partner, or family member with better credit can strengthen your application. Their score helps, and combined income improves your debt-to-income ratio.

3. Offer More Equity

If you have substantial equity (50%+ of home value), some lenders will overlook lower scores. The equity reduces their risk if you default.

4. Consider a Home Equity Loan Instead

Some lenders are more flexible with fixed-rate home equity loans than HELOCs. The fixed nature is less risky from their perspective.

5. Explore Credit Union Options

Credit unions often have more flexible underwriting than big banks. They consider your overall relationship and may work with lower scores if you're a member in good standing.

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How to Improve Your HELOC Chances

If you have 30-90 days before you need the funds, these strategies can meaningfully improve your score:

Pay Down Credit Card Balances

Credit utilization (how much you owe vs. your limits) makes up 30% of your score. Getting under 30% utilization can boost your score 20-50 points within a month.

Quick win: If you have a $10,000 limit, get your balance under $3,000 before applying.

Don't Open New Accounts

Every new credit application dings your score temporarily. Avoid opening new credit cards, auto loans, or other credit in the months before your HELOC application.

Fix Credit Report Errors

20% of credit reports have errors. Pull your free reports from annualcreditreport.com and dispute:

• Accounts that aren't yours
• Late payments that were actually on time
• Debts that have been paid
• Incorrect credit limits

Become an Authorized User

If a family member has a credit card with a long, clean history, ask to be added as an authorized user. Their good history can boost your score.

Don't Close Old Accounts

Length of credit history matters. Keep old cards open, even if unused. Closing them shortens your average account age and reduces total available credit.

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Alternatives to HELOC for Bad Credit

If a HELOC isn't happening right now, consider these options:

Personal Loan (Unsecured)

Easier to get with lower scores because your home isn't collateral. But rates will be higher (12-25%) and limits lower.

Cash-Out Refinance

If you have equity and your first mortgage rate is reasonable, some lenders are more flexible on refinances than HELOCs. You'll reset your mortgage, so do the math carefully.

Home Improvement Loans

If your goal is home improvement, some lenders offer specific home improvement loans with different (sometimes more flexible) qualification criteria.

Wait and Improve

Sometimes the honest answer is: work on your credit for 6-12 months, then apply. You'll get better terms and more options.

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The Bottom Line

Can you get a HELOC with bad credit? Sometimes. Should you?

That depends. If you're at 620+ and have good income and equity, shopping around will likely find you options. If you're below 580, the terms you'll get might not be worth it—and focusing on credit improvement first could save you thousands.

Be honest with yourself about:

• How urgently you need the funds
• Whether you can afford higher rates
• What credit improvement could do for your terms

Check your HELOC requirements →

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See Your Real Options

HonestCasa shows you what you actually qualify for—no guesswork, no bait-and-switch rates. See HELOC and home equity loan options based on your real numbers.

Check Your Eligibility →

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FAQ

What's the minimum credit score for a HELOC? Most lenders require 620-680. Some go as low as 580 with strong compensating factors like high equity or low debt-to-income ratio.

Will applying for a HELOC hurt my credit score? Yes, slightly. A hard inquiry typically drops your score 5-10 points temporarily. It recovers within a few months.

How fast can I improve my credit score for a HELOC? Paying down credit cards can boost your score within 30 days. Fixing errors can take 30-45 days. Major improvement usually takes 3-6 months of consistent work.

Can I get a HELOC with a bankruptcy on my record? It depends on how long ago and what type. Most lenders want 2-4 years after bankruptcy discharge and evidence of rebuilt credit. A few specialize in post-bankruptcy lending.