Can you get a HELOC with bad credit? Requirements and alternative options

You've built equity in your home, and you want to put it to work. Even with a lower credit score, a home equity line of credit (HELOC) could still be within reach. Whether you can get a HELOC with bad credit depends on the full picture, not just one number. Qualifying could be more difficult, and your options more limited. For some borrowers, it’s still possible.

Lenders look at your overall financial profile, and a strong application in other areas could offset a weaker score. There may also be alternative ways to access the equity in your home if a HELOC turns out to be out of reach right now.

What counts as bad credit for a HELOC?

"Bad credit" is relative. A score of 640 might disqualify you at one lender and be workable at another. That said, most HELOC lenders draw their floor somewhere between 620 and 680. You can apply with Achieve Loans even if your score is below 620. We know that every situation is different, and we are happy to consider applicants with fair credit.

For context, the national average FICO Score was 713 as of late 2025. A score below 620 puts a borrower well outside the standard approval window. However, every lender sets their own limits, so don’t give up hope.

Minimum credit score requirements for a HELOC

A HELOC is a second mortgage that allows you to borrow, repay, and borrow again up to your credit limit. Many lenders require a minimum FICO score of 620 to 680 to qualify. 

Lender type plays a role here, too. Large national banks may set their minimums at 680 or higher. Credit unions may work with scores from 620 to 660. Online lenders vary widely. Some are more flexible than traditional banks. 

One important note: Do not confuse prequalifying with fully qualifying. When you're exploring whether a HELOC is viable, you'll first prequalify, and that initial step shows you where you stand. Full approval comes later, once you submit a complete application.

Factors that could strengthen a lower-credit-score application

Your credit score is one piece of the picture. Lenders also weigh other parts of your financial profile, and strong compensating factors could make a difference for some borrowers.

Sufficient equity in your home

The more equity you have, the less risk the lender takes on. A lower loan-to-value (LTV) ratio could help offset a lower credit score for some lenders. Equity alone won't guarantee approval, but it does give lenders a stronger cushion and a stronger reason to consider your application.

Low debt-to-income ratio

Your debt-to-income (DTI) ratio compares your monthly debt obligations to your gross monthly income. A DTI below 43% shows lenders you may have room in your budget for the new payment. A HELOC does affect your DTI, so lenders look closely at this number. Along with equity, DTI is one of the strongest compensating factors a borrower can bring to the table.

Stable income and employment history

Consistent income over the past two or more years reassures lenders that you can manage an ongoing payment obligation. Multiple income sources, such as employment, self-employment, and rental income, could also strengthen your application. Stability and documentation matter here. Gaps or inconsistencies in your employment history can raise questions, even if your current income is solid.

Strong payment history on your mortgage

A HELOC is a second mortgage, so your existing mortgage payment history carries real weight. A track record of on-time mortgage payments demonstrates responsibility as a borrower, even if other factors lowered your overall credit score. Late mortgage payments could draw extra scrutiny from HELOC lenders and weaken an otherwise reasonable application.

Alternatives to a HELOC if you have bad credit

If a HELOC is out of reach with your current credit score, you may have other options that still borrow against your home equity, and some that don't require it at all.

Home equity loan

A home equity loan provides a one-time loan amount at a fixed interest rate with fixed monthly payments using your home as collateral. Credit score requirements are typically similar to those of a HELOC, though some lenders evaluate home equity loans using slightly different criteria. This could be a fit if you know exactly how much you need to borrow.

Personal loan

A personal loan doesn’t require your home as collateral. It's an unsecured loan, which means your home isn't part of the equation. Credit score requirements vary by lender, and some personal loan lenders work with borrowers who have lower scores. Interest rates are typically higher than home equity loans and HELOCs for borrowers with strong credit. For borrowers with lower credit scores, personal loan rates could be competitive with bad-credit HELOC rates. It's worth comparing both.

Steps to improve your credit before applying for a HELOC

These steps could help improve your credit profile over time. Credit improvement doesn't happen overnight. Depending on where you're starting from, meaningful progress could take months of consistent effort. 

1. Check your credit report for errors. Visit AnnualCreditReport.com and review all three reports carefully. Errors are more common than most people realize, and disputing inaccuracies could improve your score at no cost. 

2. Pay down credit card balances if you can. Credit utilization, the percentage of your available credit you're using, makes up about 30% of your FICO score. Reducing card balances could produce a relatively fast score improvement.

3. Make every payment on time. Payment history is the single largest factor in your FICO score, accounting for 35% of the total. Even one missed payment can set back your progress.

4. Avoid opening new credit accounts before applying. Each new application generates a hard inquiry on your credit report, which could temporarily lower your score.

5. Give it time. There's no shortcut to credit improvement. Consistent habits over months are typically what’s needed to move the needle.

If your HELOC application was declined, it's worth understanding why. Learn more about why a HELOC application gets denied before you apply again.

Should you get a HELOC with bad credit?

Getting a HELOC with a lower credit score is a personal decision that depends on your full financial picture. Here's a framework to help you think it through.

A HELOC with bad credit might make sense if:

• You have sufficient home equity and a specific, high-priority reason for the funds.

• The HELOC rate you've been offered is lower than the rate on your current high-interest debt.

• You have a clear plan to manage the payments.

A HELOC with bad credit might not be the right fit if:

• The rate offered is high compared to other borrowing options available to you.

• You're not confident in your ability to make consistent payments. Your home serves as collateral, so you could lose your home if you don't repay the loan.

• Your credit situation is likely to improve in the near term, which could qualify you for better rates and terms later.

Not sure if a HELOC is the right move? Read more about whether a HELOC is a good idea to get a fuller picture before making this decision.