Equity with a credit score under 580

Most HELOC lenders stop around 620. Below 580, a HELOC is rare, but getting cash from your equity isn't impossible.

Reviewed by Shawn Way, NMLS #1007298★ 4.9 from 111 reviewsUpdated October 28, 2026

Options

• FHA cash-out refinance: up to 80% of value, with some lenders accepting scores below 580.
• VA cash-out refinance: for eligible veterans; lenders set their own score floors.
• Non-QM cash-out or equity loans: credit events and low scores considered, at higher rates and with more equity required.
• USDA: for purchases in eligible areas, with lender score minimums.

Raising your score first

A few months of work can move you into a cheaper tier. A 90-day plan.

These are the situations where shopping more than 180 lenders matters most: one lender's "no" is often another's standard loan. Tell us about your situation.

What's realistic below 580

• FHA purchase or cash-out: scores of 500–579 need 10% equity or down payment on a purchase. Few lenders go this low; those that do review carefully.
• VA: no VA minimum; lenders set their own, often 580–620.
• Non-QM: some lenders go into the 500s with large equity, at higher rates.
• Home equity agreement: some HEI companies accept scores in the 500s because there's no monthly payment.

The cost of a low score

Every tier you climb lowers the price. On a $60,000 balance, two points of rate is about $1,200 a year. A few months of score work can be worth far more than starting today.

A 60–90 day plan

1. Pull all three reports and dispute errors.
2. Pay any account that's currently late to current.
3. Bring each card under 30% of its limit before its statement date.
4. Don't open new accounts.
5. Ask a lender about a rapid rescore once balances drop.

Been told no?

Example

A homeowner with a 562 score after a medical crisis owns a $500,000 home with $250,000 owed. Most HELOC lenders decline. An FHA cash-out refinance to 80% would allow $400,000, but replaces his 3.5% mortgage, a big cost. He instead spends 90 days paying down two maxed cards with savings, disputes a medical collection that should have been removed, and reaches 618. Two HELOC lenders now quote lines at higher margins, and his first mortgage stays put.

Checklist

• Three credit reports.
• Equity estimate.

Also asked

Will any lender approve a HELOC below 580?

Rarely. A few specialty lenders consider HELOC applicants with scores in the 500s and substantial equity, but most borrowers in this range do better with an FHA cash-out refinance or by improving their score first.

Does a co-borrower with better credit help with a low credit score?

Usually not for the score. Lenders typically use the lower middle score of the borrowers, so a co-borrower with better credit doesn't raise the score used, though their income can help you qualify.

How fast can I raise my credit score?

Paying cards down and fixing errors can move a score within one or two billing cycles. Recovering from recent late payments takes longer.

Can I get an FHA cash-out refinance with a low score?

Often, yes. FHA allows cash-out refinances up to 80% loan-to-value, and some lenders accept scores below 580, though lender minimums for an FHA cash-out are often 580 to 620.

Is a home equity agreement an option with a low score?

Sometimes. Some home equity agreement (HEI) companies accept credit scores in the 500s, because an HEI has no monthly payment for you to qualify for.

Will a lender consider rent or utility payment history with a low credit score?

Some lenders look at alternative credit, such as rent, utilities and insurance payments, for borrowers with thin credit files. It rarely offsets a low score caused by late payments or collections, but it can help someone with few credit accounts establish a record.

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