Can I Get a HELOC With Bad Credit?

It’s possible to get a HELOC with bad credit, but it can be harder, more expensive, and more limited than many homeowners expect.

Most lenders use credit score minimums for home equity products. Your score has a major impact on whether you’re approved, how much you can borrow, and what rate you’ll pay.

But exactly what counts as “bad credit” and whether your credit score disqualifies you from getting a HELOC varies. Here’s what you need to know about getting a HELOC with bad credit.

What Is a HELOC and How Does It Work?

A home equity line of credit (HELOC) is a revolving line of credit secured by your home. HELOCs generally have two phases: a draw period during which you can borrow money as needed, and a repayment period when you repay what you borrowed.

A HELOC differs from other loan types, like a home equity loan, in that it’s flexible and you borrow what you need. That makes it ideal for ongoing, phased expenses like home renovations or education, but also means rates can vary over time depending on the loan.

What Counts as Bad Credit for a HELOC?

There is no universal definition of “bad” credit, but here’s an overview of credit score ranges and how lenders typically view them.

There are two main credit score measurements: FICO , which is used by most lenders, and VantageScore . Here’s what both of those scores generally mean:

FICO Score Ranges

VantageScore ranges

As a general rule, the lower your score, the lower your odds of approval. That doesn’t mean approval is impossible, but it does mean it will be more difficult and might mean you have higher rates and stricter terms than a borrower with a high score.

Can You Get a HELOC With Bad Credit?

Sometimes, but the rest of your application takes on a heightened importance if you have bad credit.

Here are some factors that lenders look at if you have bad credit:

Home equity and CLTV

HELOC limits are often based on your CLTV. The more equity you have and the lower your CLTV, the safer you look on paper. That can mean better odds of approval.

Debt-to-income ratio (DTI)

DTI is your monthly debt payments compared to your gross monthly income. Many lenders look for a DTI around 43% or lower, and may want it lower if your credit is weaker.

Income stability and recent payment history

Consistent income and a clean recent track record (especially on housing payments) can help offset older negative marks.

Property type and occupancy

Primary residences often get more favorable treatment than investment properties or second homes.

What to Expect If You’re Approved With Bad Credit

Even if you qualify, a bad-credit HELOC may come with trade-offs:

• Higher interest rate than a borrower with strong credit.
• Lower credit line available, meaning you might not get the maximum CLTV.
• More documentation and underwriting scrutiny
• Less flexibility on features like rate locks, longer draw periods, or low-fee structures

That means getting approved isn’t always the same as getting a HELOC you should take.

When a HELOC Might Not Be the Best Move

Bad credit and HELOCs can be an especially risky mix.

Many HELOCs have variable rates, so payments can rise over time. It’s also worth noting that a HELOC, like other types of home equity loans, is secured by your home. That means if you default, you could be at risk of losing your home.

If you’re already stretched month-to-month, borrowing against your home can turn a cash-flow problem into a housing-risk problem.

Alternatives to a HELOC if You Have Bad Credit

If HELOC approval is unlikely, or you can’t get the HELOC you want, you have alternative options

Home equity loan

A home equity loan gives you a lump sum with a fixed rate and predictable payments. Depending on the lender, it may be more straightforward than managing a variable-rate revolving line.

Cash-out refinance

A cash-out refinance replaces your current mortgage with a new, larger one, and you receive the difference in cash. It’s not always attractive in higher-rate environments, but it can make sense in specific scenarios.

An unsecured personal loan

An unsecured personal home will generally have higher rates than a loan backed by your home’s equity, but your home isn’t collateral. Consolidating debt in a personal loan can be a way to simplify your payments without putting your home at risk.

How to Improve Your Credit for a HELOC

If you’re close to qualifying, especially if you only narrowly miss the mark for approval, there are small changes you can make to boost your odds:

1. Check your credit reports for errors and dispute inaccuracies before applying.
2. Pay down revolving balances to improve utilization.
3. Lower your DTI by paying off smaller debts or increasing documented income.
4. Avoid new hard credit inquiries in the weeks or months before applying.
5. Shop multiple lenders, because credit score minimums, fees, and risk tolerance vary.

Don’t just focus on approval. Focus on whether your monthly payment will remain affordable if rates rise.

The Bottom Line

You might be able to get a HELOC with bad credit. Other factors like DTI and the amount of equity you have in your home also play a role in your approval odds.

But that doesn’t mean you’ll get the HELOC you want. HELOCs often come with stricter terms and limitations if you have bad credit, and alternatives like a home equity loan might be a better option for predictable payments.

FAQs: HELOC With Bad Credit

Can I qualify for a HELOC with a credit score below 600?

It’s possible but uncommon. Expect strict terms and debt-to-income requirements if you get approved for a HELOC with a credit score below 600.

What’s the minimum credit score I need for a HELOC?

Many lenders use 620 as a baseline, although in some circumstances approval with a credit score as low as 600 is possible. A lower credit score will generally carry stricter terms.

Are there HELOC lenders that don’t check credit?

A credit check is standard for HELOCs, since the lender is evaluating your risk on a loan secured by your home. Many lenders start off with a “soft” credit check that won’t affect your credit score.

If I’m denied, what should I do?

If you’re denied, ask for the adverse action details. That’ll give you insight as to why you were denied, and help you choose the highest-impact fixed to boost your approval odds. You might consider an alternative loan type, like a home equity loan, while you boost your credit.

Is a home equity loan easier than a HELOC with bad credit?

Sometimes, but it varies buyer-to-buyer. A fixed-rate, fixed-payment structure can be simpler to underwrite and easier for borrowers to manage, but approval still hinges on equity, income, your debt-to-income-ratio, and credit