Can you get a HELOC with bad credit?
It's harder, not impossible. Equity and a clean recent payment history do most of the work.
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Can you get a HELOC with bad credit?
Sometimes, but it's harder. Most HELOC lenders want a credit score of 620 or higher; some go lower with substantial equity, low debt-to-income and no recent late payments, at higher margins. Below that, a few months of credit work often saves more than a high-margin line. In 2026, HELOCs Shawn Way's team funded started at a median 7.55% for credit scores of 760+ and 11.47% for scores under 640.
On this page
What lenders weigh
- How much equity stays in the home after the line
- Mortgage payment history over the last 12–24 months
- Debt-to-income ratio
- Why the score is low: a past event or ongoing late payments
Use a free calculator, or get your HELOC rate from Shawn.
Other options
- A cash-out refinance through FHA accepts lower scores than most HELOCs.
- A co-borrower on title with stronger credit.
- Pay down cards and wait two statement cycles, then reapply.
A 90-day plan to qualify
- Pull all three credit reports and dispute errors.
- Pay every card below 30% of its limit; below 10% is better.
- Set every account to autopay the minimum so nothing goes late.
- Don't open or close accounts.
- Reapply after two statement cycles report the lower balances.
Moving from the 640–679 band to 680–719 typically cuts the margin by about three-quarters of a point. See the full score table.
How much the score changes the price
On a $50,000 balance, the difference between a borrower at 760+ and one at 620–639 can be two to four points of margin, about $1,000–$2,000 a year in interest. That's why a few months spent raising a score often beats taking the first offer.
What can offset a low score
- More equity: borrowing to 70% instead of 85% of the home's value.
- Low debt-to-income: under about 36%.
- Clean recent history: no late payments in the past 12 months, especially on the mortgage.
- Cash reserves: several months of payments in savings.
- A smaller line sized to the actual need.
Check for reporting errors first
Errors are common: accounts that aren't yours, debts reported twice, late payments that weren't late, paid collections still showing balances. Dispute them with each credit bureau that shows them. Corrections can move a score more than months of payments.
If a HELOC isn't available yet
Programs for scores under 580, an FHA cash-out refinance (which allows lower scores), a home equity agreement, or a secured credit-builder plan while you prepare. Been told no?
Example
A homeowner with a 618 score, a $600,000 home and a $300,000 mortgage gets one offer at prime plus 3.5. She pays three card balances down below 30% over two months, and a rapid rescore puts her at 664. She now qualifies at prime plus 2, saving about $750 a year on a $50,000 balance.
A 90-day checklist
- Week 1: pull reports and dispute errors.
- Weeks 1–4: pay all accounts on time; bring any late account current.
- Weeks 2–8: pay card balances under 30% before statement dates.
- Week 10: check scores; ask a lender about a rapid rescore if balances dropped.
Related question: HELOC for non-U.S. citizens
Also asked
Will one late payment ruin my chances of getting a HELOC?
Not usually. One late payment more than a year ago rarely stops a HELOC, but a recent 30-day late on your mortgage is the most damaging kind.
Can a co-borrower with better credit help me get a HELOC?
Partly. A co-borrower's income helps you qualify, but most lenders price on the lower middle score, so it doesn't raise the score used for pricing. Some of Shawn's programs price on the higher of the two scores.
Is a credit repair company worth it before applying for a HELOC?
Usually not. You can dispute credit report errors yourself for free with each bureau. Avoid credit repair companies that charge upfront fees or promise to remove accurate information.
Do HELOC lenders use rent history?
Rarely for scoring, but some consider it for thin credit files. It won't offset late payments or collections.
Can a co-signer help me get a HELOC?
Only as a co-borrower on title. HELOC lenders usually require anyone helping you qualify to be on the home's title; that person's income can help, though pricing may still use the lower score.
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Sources
Official sources behind this guide.
- What is the difference between a home equity loan and a HELOC? · Consumer Financial Protection Bureau
- What you should know about home equity lines of credit (booklet, PDF) · Consumer Financial Protection Bureau
- Regulation Z §1026.40: Requirements for home equity plans · Consumer Financial Protection Bureau
- Find a HUD-approved housing counselor · Consumer Financial Protection Bureau