Key takeaways
- You may be able to get a HELOC with bad credit. Lenders weigh home equity, income, and debt-to-income ratio alongside credit score.
- Your combined loan-to-value ratio and DTI can matter just as much, and strong numbers there may offset a lower score.
- You could improve your odds before applying by paying down revolving debt, checking your CLTV, and correcting credit report errors.
Yes, you may be able to get a home equity line of credit with bad credit, although approval isn’t guaranteed and terms vary by lender. A home equity line of credit (or HELOC) is a revolving line of credit secured by your home’s equity. While your credit score matters, lenders may also consider your home equity, income, and debt-to-income ratio (DTI) when deciding whether you qualify.
What counts as “bad credit” for a HELOC?
Bad credit generally means a FICO Score below the mid-600s, although lenders don’t all use the same cutoff.
For context, FICO categorizes its score ranges as follows:
- Poor: 579 or below
- Fair: 580–669
- Good: 670–739
- Very good: 740–799
- Exceptional: 800+
“Bad credit” isn’t a formal credit-score category, so the term can refer to different score ranges depending on the lender or source. It generally describes a credit profile that’s considered below average, and may include scores in the poor or fair ranges.
A poor or fair score can make qualifying for a HELOC or other home equity loan more difficult, but it doesn’t mean you can’t qualify. Lenders may have different minimum-score requirements, and some may consider other aspects of your financial profile when evaluating an application.
That’s particularly important with a HELOC because the loan is backed by your home. If you have substantial equity, steady income, and a manageable level of debt, those strengths may help compensate for a lower credit score.
What’s the minimum credit score needed for a HELOC?
Most lenders set a minimum credit score around 620, while borrowers with scores of 680 or higher may have access to more favorable rates or terms. However, there is no universal minimum score for every HELOC, and some lenders may consider borrowers with lower scores.
Here’s how different credit ranges may affect your options:
| Credit score | What it may mean for your HELOC application |
| 579 or below | Qualifying may be difficult, and fewer lenders may consider the application. |
| 580–619 | Some lenders may consider you, but other financial factors may need to be particularly strong. |
| 620–679 | You may meet the minimum requirements at some lenders, though your rate and terms can depend on the rest of your financial profile. |
| 680–739 | You may have access to more competitive terms, depending on your equity, DTI, income, and other factors. |
| 740 or above | A very good score can strengthen an application, although lenders still evaluate the rest of your finances. |
These ranges are guidelines rather than guarantees. A lender may approve someone with a lower score while declining someone with a higher score if the second borrower has less equity, a higher DTI, or less stable income.
That’s why a credit score shouldn’t be viewed in isolation. If your score is below 620, for example, you may still have options if you have substantial equity and a strong overall financial profile. The opposite is also true: having a score above a lender’s stated minimum doesn’t guarantee approval.
What are the requirements for a HELOC?
Credit score is only one part of HELOC requirements. Lenders typically look at home equity, combined loan-to-value ratio, income, and debt-to-income ratio when determining whether you can afford the line of credit.
- Home equity and combined loan-to-value ratio (CLTV). Lenders typically want you to retain 15% to 20% equity after opening a HELOC, which caps your CLTV at around 80% to 85% for most lenders.
- Income. Steady, verifiable income signals you can manage the payments, and it can matter as much as your score when a lender is deciding on a borderline application.
- Debt-to-income ratio (DTI). Your DTI is your monthly debt payments divided by your gross monthly income. Most lenders prefer a DTI below 43%, though some allow up to 50% depending on your other numbers. A lower DTI gives a lender more confidence that you can take on new debt.
| Factor | Typical requirement | What changes with bad credit |
| Credit score | 620+ at most lenders | Strong equity and DTI can help offset a lower score |
| Equity / CLTV | Max CLTV around 80%–85% | More equity gives a lender more room to approve you |
| DTI | Below 43% (some allow up to 50%) | A lower DTI can offset a lower score |
How can you improve your chances of getting approved with bad credit?
You may be able to improve your odds of HELOC approval without waiting months or years for your credit score to change. A number of steps can strengthen the parts of your financial profile that you control.
- Calculate your current CLTV, and consider requesting a smaller line if your equity is limited.
- Pay revolving balances down, and keep that card’s utilization near 30% or lower. This is one of the fastest-acting things you can do to your score before applying.
- Dispute any errors on your credit report. Even one incorrect late payment can drag your score down.
- Wait roughly 30 to 60 days after any new credit application before applying for a HELOC. A recent hard inquiry can temporarily lower your score.
- Ask whether the lender allows a co-borrower, which can strengthen a borderline application.
- Get prequalified through a soft credit check first. It won’t affect your score, and it gives you a realistic read on your odds before you apply.
None of these guarantee approval, but they can meaningfully improve your odds and the terms you’re offered.
Can you get a HELOC through Upstart Home Lending?
It may be possible. A HELOC through Upstart Home Lending weighs home equity, income, and debt-to-income ratio alongside credit score, so a lower score alone doesn’t automatically rule you out.
For the full picture of what’s evaluated, see the complete HELOC requirements breakdown.
If you want a clearer read on where you stand, you can check your HELOC eligibility with a rate check that starts with a soft credit pull1.
Potential risks of HELOC with bad credit
A HELOC with bad credit tends to make the most sense when you have substantial equity, a clear repayment plan, and a purposeful use like debt consolidation or a necessary home repair, not everyday spending. It’s riskier when your income is unstable, you’re already carrying high debt, or you don’t fully understand how the payment can change over time.
Because a HELOC is secured by your home, missing payments can put your home at risk of foreclosure. That’s the core trade-off against an unsecured option like a personal loan.
The risk most borrowers miss is the payment shift. Many HELOCs are interest-only during the draw period, then shift to principal-plus-interest once repayment begins, which can meaningfully raise the monthly payment, sometimes close to doubling it. If you’re already financially stretched, that jump matters more than getting approved in the first place.
Before you sign, know exactly what your payment looks like once the draw period ends, not just what it looks like on day one.
Alternatives to a HELOC with bad credit
If you don’t have enough home equity, don’t meet a lender’s credit requirements, or simply don’t want to use your home as collateral, you have other borrowing options.
Personal loans for bad credit
You can use a personal loan for many of the same types of expenses that might otherwise lead someone to consider a HELOC, although rates, loan amounts, repayment terms, and eligibility requirements vary.
As with a HELOC, lenders can consider factors beyond your credit score when evaluating an application.
The biggest distinction is collateral: a HELOC is secured by your home, while an unsecured personal loan doesn’t put your home directly at risk if you can’t repay the debt. That doesn’t make unsecured borrowing risk-free, but it can make it worth considering if you don’t want to borrow against your home.
Frequently asked questions
Is guaranteed approval for a HELOC real?
No. There is no legitimate way to guarantee approval for every borrower. Lenders evaluate your credit, income, existing debt, home equity, and other information before deciding whether you qualify. Be cautious of advertisements for a “guaranteed home equity loan with bad credit” or similar promises.
Does applying for a HELOC hurt your credit with a hard credit check?
Checking your rate typically starts with a soft credit pull, which doesn’t affect your score. If you move forward with a full application, lenders run a hard inquiry at that point, which can cause a small, temporary dip.
What’s the minimum credit score needed for a HELOC?
Most lenders set a minimum around 620, though some go as low as 600. Where your score falls affects both your approval odds and the rate you’re offered.
What matters more than credit score when qualifying for a HELOC?
No single factor typically outweighs the others. Your home equity, income, and debt-to-income ratio are all weighed alongside your credit score, and strength in one area can help offset weakness in another.
What banks or lenders give home equity loans to borrowers with bad credit?
Most traditional banks stick close to the 620+ standard, but some online lenders and credit unions will consider lower scores if the rest of the application is strong.
Why choose a HELOC over a personal loan if you have bad credit?
A HELOC may make sense if you have substantial home equity and need access to a larger or revolving source of funds. A personal loan doesn’t require home equity, though rates, loan amounts, and eligibility vary by lender. The right choice depends on how much you need, what you’re using the money for, and what repayment terms you can afford.
What HELOC interest rates can you expect with bad credit?
There isn’t one rate for borrowers with bad credit. Your rate can depend on your credit profile, equity, DTI, loan amount, and other factors, as well as current market conditions. In general, stronger credit may help you qualify for more competitive terms, while a lower score can make borrowing more expensive.
Can you improve your odds of HELOC approval before applying?
Yes. Paying down revolving balances, disputing credit report errors, waiting out a recent hard inquiry, and getting prequalified with a soft credit check can all help before you submit a full application.
Is HELOC interest tax deductible?
Sometimes, but not automatically. The tax treatment can depend on how you use the money. Generally, interest on home equity debt may qualify for the home mortgage interest deduction when the funds are used to buy, build, or substantially improve the home securing the loan, subject to applicable tax rules and limits. If you’re considering a HELOC partly for its potential tax benefits, consult a qualified tax professional and review current IRS guidance before relying on a deduction.
Won't affect your credit score¹