Getting a HELOC with Bad Credit: What Lenders Look For in 2026

Can you get a HELOC with bad credit? The answer is that it depends on several factors, like your lender’s requirements, the amount of equity you have in your home, your income, your debt-to-income ratio, and more. Your credit score is only one part of your HELOC application. That said, most lenders prefer applicants with scores of 620 or above.

If you’re not sure if you qualify for a HELOC, below is more information about your approval odds based on your credit score. We’ll also answer frequently asked questions and share alternatives to consider.

Can you get a HELOC with a 500 credit score?

HELOCs tend to be a riskier product for lenders. They are more complex than a personal loan because HELOCs are tied to your home. They also tend to have variable interest rates and flexible draw periods. Because of that, it’s less predictable how (and when) borrowers will use and repay the money.

Because of that, lenders tend to set the bar high. After all, they want to make sure that you have a proven track record of managing debt responsibly. A credit score in the 500s shows that in the past, you may have had late payments, defaults, or high credit utilization, all of which make you a riskier borrower in lenders’ eyes. From their perspective, it may be too risky to offer a line of credit secured by your home without a stronger credit profile.

If you still want to get a HELOC, take some steps to improve your credit. Most lenders require a minimum credit score of 620 to consider your application, and even then, approval isn’t guaranteed. We’ve reviewed HELOCs for fair credit if you’re in the rebuilding phase and want to explore your options.

In general, lending has become tighter since 2021; interest rates have risen due to the Federal Reserve raising rates. In an effort to avoid an environment similar to the 2007 to 2009 Great Recession and housing crisis, lenders—particularly with first and second mortgages—want to ensure they’re loaning to reliable borrowers.

HELOC approval odds by score

Getting a HELOC for bad credit is rare, as that typically refers to scores between 300 and 579. If you’re in this range, getting approved for a traditional HELOC is unlikely, even if you have a good income and substantial equity in your home.

Here’s how approval odds break down at the lower end of the credit spectrum:

Credit score	Realistic approval odds	What to expect
300–499	Very unlikely	Most lenders won’t consider credit scores in this range. Take some time to focus on rebuilding your credit first.
500-579	Unlikely	It’s unlikely to be approved for a HELOC with this range of credit score, but improving your score above 600 could help.
580-599	Limited	Approval is still challenging in this score range. Keep focusing on improving your credit score.
600-619	Possible with certain lenders	Some lenders do consider scores starting at 600 if you have other strong factors, like income and significant home equity.
620-679	Possible	Many lenders consider a 620 a minimum credit score to consider HELOC applications.
680+	Better approval odds	If you have enough equity, manageable debt, and a stable income, more lenders may consider you for a HELOC.

How does a low credit score affect your HELOC?

If you can boost your credit score enough to be approved for a HELOC, it’s important to know how a lower score can affect the loan terms. Getting a HELOC for bad credit will likely mean paying a higher interest rate, making your credit line more expensive. 

Interest rates for many HELOCs are variable and based on the federal prime interest rate. The lender takes the prime rate and adds a margin based on your perceived creditworthiness; the higher the risk, the higher the margin. That equals more interest paid on the loan. 

Here’s how it works:

• Anna has a good credit score of 780: The lender offers her a rate of prime plus 2%. At a prime of 8%, that equals a 10% interest rate. On a $50,000 HELOC with a draw period of five years, Anna will pay $25,000 in interest if she takes out the entire $50,000 at the beginning of the draw period (assuming no change in the prime interest rate and no principal payments while she’s in the draw period).
• Brian has a fair credit score of 620: His lender offers a rate of prime plus 6% for a total of 14%. On the same $50,000 HELOC withdrawn at the beginning of the five-year draw period, Brian will pay $35,000 in interest, $10,000 more than Anna.

Here’s how the different interest rates affect the total cost of a $50,000 HELOC over five years:

Borrower	Credit score	Interest rate	5-year interest
Anna	780	10%	$25,000
Brian	620	14%	$35,000
Additional interest paid by Brian	$10,000

Bad credit can also affect the size of your HELOC credit limit. To help mitigate risk, lenders will likely offer you a smaller line of credit compared to someone with good credit. Here’s an example of how this could play out:

• Anna, with a 780 credit score, has $200,000 equity in her home. Her lender may offer her a higher credit line because of that.
• Brian, with a 620 credit score, also has $200,000 equity in his home. To lower the risk, the lender may offer him a smaller credit line, even though he has the same amount of home equity as Anna.

Other terms, such as the length of your draw and repayment periods, could also be shortened because of bad credit. You might even pay an annual fee on the credit line to help compensate for the risk of lending. 

How to improve your approval odds for a HELOC with bad credit

Many lenders require a minimum score of 620 to apply for a HELOC. Here are a few ways you can improve your approval odds if you have a lower credit score:

1. Pay down debt: Reducing your outstanding debt could boost your credit score by lowering your credit utilization ratio. Paying off debts would also reduce your DTI, making you a more attractive prospect to lenders. 
2. Increase home equity: Paying off more of your mortgage increases your home equity. More equity equals more collateral, which reduces lenders’ risk and improves your chances of getting approved for a HELOC. 
3. Check credit report for errors: Credit report errors can harm your score. Reviewing your reports for errors and disputing them with the credit bureau could improve your score if they correct and remove the errors.
4. Consider a cosigner: A cosigner on a HELOC is someone who applies alongside you and assumes equal legal responsibility for the debt. A cosigner could bolster your application and help you qualify for better terms if they have a solid credit score. 

Along with these tips, follow the usual best practices for improving a credit score. That includes paying bills on time, keeping older accounts open, and not applying for new credit that isn’t a necessity.

You could possibly renegotiate for a better HELOC rate down the road if you and a cosigner can prove that a past hardship caused your credit rating to decline and reflect poorly on your credit report. Examples could include divorce, unexpectedly needing to care for a family member (and using your savings or credit cards), filing for Chapter 7 bankruptcy, or you or your spouse losing your job, resulting in reduced overall income.

But keep in mind: You must prove you have recovered from this and have a reliable source of income. It’s worth a shot to negotiate—or wait to apply for a HELOC if it isn’t a critical need. In the meantime, you could build up savings and work on improving your credit score and credit report. You can also ask the lender what it recommends and wants to see improved on your credit report to approve your loan request.

Pros and cons of getting a HELOC with bad credit

Consider the advantages and disadvantages before trying to get a HELOC if you have bad credit.

If I can’t get a HELOC with bad credit, what should I do instead?

If a HELOC isn’t in the cards due to bad credit, you still have options to tap into your home equity or access the cash you need.

1. Home equity agreement

A home equity agreement (HEA) lets you turn your equity into cash without taking on monthly payments or interest. Instead of borrowing money, you’re selling a share of your home’s future value in exchange for a lump sum today.

These agreements often have more flexible credit requirements than traditional loans, making them a potential fit for homeowners with lower scores.

2. Personal loan

Some lenders offer personal loans to borrowers with poor credit, though rates may be higher. If you don’t have enough home equity or prefer an unsecured option, a personal loan could help cover your expenses.

3. Cash-out refinance

If you’ve built substantial equity and your credit isn’t severely damaged, a cash-out refinance could be another route. This replaces your existing mortgage with a new, larger loan—and gives you the difference in cash. (If you currently have a low mortgage rate, this may not be the best option for you.)

4. Loan from a family member or friend

If none of the above are workable, consider asking someone you trust for a private loan. It may not be ideal, but it could buy you time to improve your credit and qualify for better financing in the future.

No matter which option you choose, the key is to avoid predatory lenders and high-cost products that can trap you in a cycle of debt. Focus on rebuilding your credit so that more favorable options—like a HELOC—become available down the line.

HELOCs for bad credit FAQ

How we researched HELOC options for bad credit

Since 2018, LendEDU has evaluated home equity companies to help readers find the best home equity loans and HELOCs. Our latest analysis reviewed 850 data points from 34 lenders and financial institutions, with 25 data points collected from each. This information is gathered from company websites, online applications, public disclosures, customer reviews, and direct communication with company representatives.

These star ratings help us determine which companies are best for different situations. We don’t believe two companies can be the best for the same purpose, so we only show each best-for designation once.

Bottom line: Can you get a HELOC with bad credit?

Getting a HELOC with bad credit can be challenging, especially if your credit score is below 600. Most lenders prefer scores of at least 620, but your income, existing debt, and available home equity also play a role in determining your eligibility.

If your credit score is too low to qualify for a traditional HELOC, you may still have options. Home equity agreements (HEAs), for example, may have more flexible credit requirements and offer another way to access your home’s equity without taking on monthly loan payments.