In this guide
- Minimum credit score for a HELOC
- Score bands — what each tier means
- Requirements by lender type
- How your score affects your rate — real numbers
- Other factors lenders consider
- How to boost your score before applying
- Realistic improvement timeline
- Can you get a HELOC with bad credit?
- Frequently asked questions
Your credit score is one of the most important factors a lender considers when you apply for a HELOC. It determines not just whether you are approved, but what interest rate you pay for the entire life of the credit line — and that difference can add up to thousands of dollars.
A 1.5% rate difference on a $100,000 HELOC costs you an extra $1,500 per year in interest during the draw period alone. Over a 10-year draw period, that is $15,000 — simply because of a credit score tier. This guide explains exactly where you need to be, how lenders use your score, and the fastest legitimate ways to improve it before you apply.
Minimum credit score for a HELOC
Most mainstream lenders set a hard minimum of 620 for HELOC applications. Below that threshold, virtually all banks, credit unions, and online lenders will decline your application outright.
However, 620 is the floor — not the target. A score of 620 will typically result in the highest available rate, the fewest lender options, and the strictest requirements on every other factor (equity, income, DTI). Think of it as the door — you need it to get in, but you want to be much further into the room before you apply.
The practical target is 700. At 700 and above, you unlock significantly better rates, a much wider pool of lenders to compare, and more flexibility on other qualification factors. The difference between applying at 650 versus 720 can easily be 1.5% in rate — and that compounds meaningfully over years of interest payments.
Score bands — what each tier means in practice
Requirements by lender type
Not every lender applies the same credit score threshold. Here is how requirements typically differ — and what that means for where you should apply first:
| Lender type | Typical minimum score | Notes |
|---|---|---|
| Large national banks | 660 – 680 | Stricter and more consistent underwriting standards; often reward existing customers |
| Credit unions | 620 – 640 | Often more flexible; take a broader view of your application; membership required |
| Online lenders | 640 – 660 | Faster process; rates vary widely — shop carefully |
| Community banks | 620 – 650 | May consider compensating factors and local relationships more than pure score |
| Military credit unions | 580 – 620 | Members only (e.g. Navy Federal, PenFed); most flexible in the market |
| Non-QM / specialist lenders | 580 – 620 | Higher rates and fees; genuinely last resort for lower-score borrowers |
Credit unions consistently offer lower rate margins and more flexible underwriting than large banks — particularly for borrowers in the 640–700 score range. If your score is in this zone, a credit union should be your first port of call. See our guide to the best credit unions for HELOCs in 2026.
How your credit score directly affects your HELOC rate — real numbers
Lenders set your interest rate by adding a fixed margin above the US Prime Rate. That margin is determined largely by your credit score — a higher score means a lower margin, and a lower margin means less interest paid every month for the entire life of your HELOC.
The Prime Rate as of June 2026 is 6.75%, as published in the Federal Reserve's H.15 statistical release. Here is what typical margins look like across score tiers, and what that means in real monthly cost:
| Credit score | Typical margin above Prime | Approx. rate (June 2026) | Monthly interest on $75,000* |
|---|---|---|---|
| 760+ | 0.00% – 0.50% | 6.75% – 7.25% | ~$422 – $453 |
| 720 – 759 | 0.50% – 1.00% | 7.25% – 7.75% | ~$453 – $484 |
| 680 – 719 | 1.00% – 1.75% | 7.75% – 8.50% | ~$484 – $531 |
| 640 – 679 | 1.75% – 2.75% | 8.50% – 9.50% | ~$531 – $594 |
| 620 – 639 | 2.75% – 4.00% | 9.50% – 10.75% | ~$594 – $672 |
*Interest-only draw period payment. Prime Rate source: Federal Reserve H.15 release, June 2026. Margins are indicative ranges based on published lender data — your actual rate will depend on your full application profile and the lender you choose.
The difference between a 760+ score and a 620–639 score on a $75,000 HELOC is approximately $250 per month in interest — or $3,000 per year. Over a 10-year draw period, that gap costs you $30,000 in extra interest. Spending three to six months improving your score before applying is almost always worth it.
Other qualifying factors lenders consider alongside your credit score
Credit score is the headline number — but lenders evaluate your full financial picture. Meeting the score threshold gets you in the door; these factors determine approval and rate alongside it:
| Factor | Typical requirement | Why it matters |
|---|---|---|
| Home equity / CLTV | Maximum 80–85% CLTV; retain at least 15–20% equity | Primary security for the lender — less equity = higher risk |
| Debt-to-income ratio (DTI) | Below 43–50%; under 36% preferred | Ensures you can service the new payment alongside existing debts |
| Income verification | 2 years W-2s or tax returns; recent pay stubs | Proves stable income to support repayment through both periods |
| Mortgage payment history | No late payments in past 12–24 months | Lenders scrutinise your primary mortgage history especially closely |
| Employment stability | Consistent history; recent job changes can trigger questions | Lenders want evidence of ongoing reliable income |
| Property type | Primary residences favoured; investment properties harder | Primary residences carry lower default risk historically |
How to boost your credit score before applying
Credit scores are not fixed. With focused action, most borrowers can improve by 30–60 points within three to six months. Here are the six most impactful moves, in order of typical impact:
-
1
Pay down credit card balances
Credit utilisation — your balance divided by your limit — accounts for approximately 30% of your FICO score. Getting below 30% on each card delivers fast results; getting below 10% is even better. This is typically the highest-impact action you can take. Changes appear on your report within one to two billing cycles after the statement closes.
Potential: +20 to +50 points -
2
Dispute errors on your credit report
Pull your free reports from AnnualCreditReport.com — the only federally authorised free report source. One in five credit reports contains an error significant enough to affect a score, according to the CFPB. Creditors have 30 days to respond to a dispute. Correcting an error costs nothing and can produce a significant score jump.
Potential: +10 to +40 points -
3
Never miss a payment — set up autopay
Payment history accounts for 35% of your FICO score — the single largest factor. Set up automatic payments for at least the minimum on every account. Even one missed payment in the 12 months before your HELOC application can significantly hurt your approval odds and rate. Preventing drops is as important as creating gains.
Prevents major score drops -
4
Avoid new credit applications
Each hard inquiry temporarily reduces your score by a few points and signals to lenders that you may be seeking credit aggressively. In the three to six months before your HELOC application, do not apply for new credit cards, car loans, or any other new credit lines. The benefit of avoiding new inquiries compounds with the other actions above.
Preserves 5–15 points -
5
Keep old accounts open
Credit history length makes up 15% of your score. Closing old credit card accounts — even ones you do not use — shortens your average account age and reduces your total available credit, both of which can hurt your score. Keep them open and use them occasionally for a small purchase, paying the balance in full each month.
Preserves 5–20 points -
6
Use Experian Boost
Experian Boost is a free tool that adds on-time utility, phone, and streaming subscription payments to your Experian credit file — payments that are not normally reported to credit bureaux. It will not help with all lenders (those who pull Equifax or TransUnion instead) but can give your Experian score a quick, legitimate lift at zero cost.
Potential: +5 to +20 points
Realistic improvement timeline
How quickly can you realistically improve your score? Here is what to expect from each action:
| Action | When improvement shows | Typical impact |
|---|---|---|
| Pay down credit card balances | 1–2 billing cycles (30–60 days) | High — 20–50 points possible |
| Dispute and correct errors | 30–45 days after resolution | Variable — depends on the error |
| Stop missing payments | Immediate prevention; older late marks fade over months | Prevents ongoing damage |
| Reduce new inquiries | 3–6 months for inquiries to have less impact | Moderate — 5–15 points |
| Recovering from a late payment | 12–24 months of clean history softens impact | Gradual — patience required |
| Removing a collection account | 30 days after successful dispute or pay-for-delete | Potentially significant |
The most impactful actions — paying down balances and disputing errors — show results within 30–60 days. Give yourself at least three months of runway before your target application date. Six months is better if your score needs significant work. The rate improvement you earn from a higher score will almost certainly outweigh any delay in accessing funds.
Can you get a HELOC with bad credit?
If your credit score is below 620, mainstream lenders will decline your application. However, these options are worth exploring:
- Credit unions: Member-owned institutions often take a more holistic view and may work with scores down to 580. Military credit unions (Navy Federal, PenFed) are the most flexible in the market for eligible members.
- Community banks: Local lenders who know their market may consider compensating factors — a very low CLTV, a long banking relationship, or exceptionally stable income.
- Wait and rebuild: For most borrowers below 620, the smartest move is spending six to twelve months improving before applying. The rate difference between 600 and 680 is so significant that waiting almost always pays off.
Be wary of any lender promising "guaranteed HELOC approval" regardless of credit score. Products marketed this way typically carry extremely high rates (12%+), large origination fees, or balloon payment terms that put your home at serious risk. Your home is collateral — protecting it means not rushing into a product with predatory terms just because you qualify.
Frequently asked questions
Which credit score do HELOC lenders actually use?
Most lenders use FICO scores. For home equity products, lenders typically pull your score from all three bureaux (Equifax, Experian, TransUnion) and use the middle score. For joint applications, they typically use the lower of the two borrowers' middle scores. The mortgage-specific FICO versions used are FICO Score 2 (Experian), FICO Score 5 (Equifax), and FICO Score 4 (TransUnion) — these can differ from your general FICO score or VantageScore.
Does applying for a HELOC hurt my credit score?
Yes, a hard inquiry will appear and may reduce your score by a few points temporarily — typically 3–5 points, recovering within a few months. However, most scoring models treat multiple mortgage-related inquiries within a 14-day window as a single inquiry, recognising that consumers are rate shopping. So getting quotes from three lenders in a two-week period has minimal additional impact beyond the first inquiry.
How long does it take to improve my credit score enough to qualify?
If you are currently below 620 and need to reach 680+, a realistic timeline with focused effort is three to twelve months, depending on what is dragging your score down. Paying down balances and correcting errors can produce meaningful improvement within 60 days. Recovering from more serious issues — missed payments, collections — takes longer but improves steadily with consistent on-time payment behaviour.
Will having a HELOC affect my credit score long-term?
Opening a HELOC adds a new account to your credit file, which may temporarily lower your average account age. Once open, a HELOC functions like revolving credit — keeping your drawn balance low relative to your limit helps your utilisation ratio, and making all payments on time builds positive history. For most responsible borrowers, a well-managed HELOC has a neutral to positive long-term credit impact.
Can I use a co-borrower to improve my chances?
Yes — adding a co-borrower with a stronger credit profile can improve your approval odds and potentially your rate. However, the co-borrower's income and debts are also factored in, which affects your DTI calculation. Importantly, the co-borrower is equally responsible for the debt and the property could be affected if either borrower defaults. This is a significant commitment for both parties.
My score dropped recently due to a large purchase — should I wait?
If your score dropped because of a large credit card balance from a recent purchase, pay that balance down before applying. Your score should recover within one to two billing cycles once the lower balance is reported. This is a common situation and entirely fixable quickly — there is no need to wait months if the drop was purely utilisation-driven.