Key Takeaways
- The minimum credit score for a home equity loan often starts around 620, though some lenders set higher minimums between 640 and 680.
- A higher credit score can help you secure a lower rate, larger loan, or more lender options, but it does not guarantee approval or the lowest advertised rate.
- Lenders also consider your credit history, available equity, combined loan-to-value (CLTV) ratio, debt-to-income (DTI) ratio, and documented income.
- You may qualify for a home equity loan with bad credit, but lower scores often limit your options and increase borrowing costs.
The credit score needed for a home equity loan depends on the lender. Many consider scores around 620 or higher, while others set a higher minimum. Meeting one lender’s credit requirements does not guarantee approval elsewhere because each lender uses its own underwriting guidelines.
Meeting a lender’s minimum credit score is only one part of the approval process. Your rate and loan amount also depend on your home equity, mortgage balance, income, debts, payment history, property, and the lender’s guidelines.
Check your home equity loan options. Start hereIn this article (Skip to...)
- Minimum credit score for a home equity loan
- How your credit score affects your loan
- Other home equity loan credit requirements
- Getting a home equity loan with bad credit
- How to improve your credit before applying
- HELOC vs. home equity loan credit score requirements
- Compare home equity loan offers
- FAQs about minimum credit score for home equity loans
Minimum credit score for a home equity loan
Some home equity lenders accept credit scores as low as 620, while others require 640, 660, 680, or higher. Specialty lenders may consider scores near 600. Each lender sets its own minimum and may have additional requirements based on loan amount, property type, occupancy, and combined loan-to-value ratio.
Additionally, the minimum credit score for home equity loans may differ from the score required for a lender’s best terms. For example, in fall 2026, U.S. Bank required a minimum score of 660, while its sample rates assumed at least 730 and a loan-to-value ratio of 60% or less. Your APR also depends on the loan amount, term, property, income, debts, and other underwriting factors.
These examples illustrate that your credit score alone does not determine your rate or approval.
740–850 | A wider lender selection and a better chance of competitive pricing, subject to your equity, DTI, loan amount, and other requirements |
700–739 | A score above many published minimums and within the range some lenders use for their better pricing tiers |
660–699 | A score that meets some bank and home equity lender minimums, although the rest of your application still affects approval and cost |
620–659 | A common starting range, with fewer choices and potentially higher rates or lower borrowing limits |
600–619 | Possible consideration from a specialty lender, often with more restrictions or higher costs |
Below 600 | Few standard home equity loan options; improving your score may make borrowing less expensive and expand your lender choices |
These ranges indicate possible lending outcomes, not guaranteed approvals, and do not replace standard FICO categories. FICO classifies scores below 580 as poor, 580–669 as fair, 670–739 as good, 740–799 as very good, and 800 or higher as exceptional.
Compare home equity lenders nowHow your credit score affects your loan
Lenders use your credit score and credit history to assess your likelihood of repaying the loan. A higher score can influence several aspects of your home equity loan offer:
- Approval: You must meet the lender’s minimum score unless its program permits an exception.
- Interest rate: Lenders generally offer lower rates to applicants with stronger credit histories.
- Loan amount: Some lenders reduce their maximum combined loan-to-value ratio when a borrower has a lower score.
- Available products: A lower score may leave you with fewer lenders, loan terms, or repayment options.
Even a high score cannot compensate for every weakness in an application. A lender may decline your request if the proposed loan leaves too little equity in the home or if the new payment raises your debt-to-income ratio above its limit.
What experts are saying
Thomas Brock, CFA, CPA
“I’ve seen homeowners put too much emphasis on getting their credit score above a certain number, only to find that their equity, income or existing debt load plays a bigger factor in the underwriting process. Before focusing too heavily on improving your credit score, determine how the lender evaluates loan applications and whether the loan you want is realistic based on your overall financial picture.”
Other home equity loan credit requirements
Your credit score is important, but lenders also evaluate your ability to repay and your available equity. Before applying for a home equity loan, review your credit score, repayment capacity, and equity.
Credit history | Late payments, collections, bankruptcies, account balances, and recent applications for credit | A score above the minimum may not overcome serious recent credit problems |
Equity and CLTV | Your home’s value, current mortgage balance, and requested loan amount | A lower CLTV leaves more equity in the property and may support approval or better terms |
DTI | Your monthly debt payments, including the proposed home equity loan payment, compared with your gross monthly income | A lower DTI gives you more room for the new payment |
Income | Wages, self-employment income, retirement income, assets, or other income the lender can document and accept | The lender must determine that you can repay the loan |
Property and loan details | Occupancy, property type, location, loan amount, and lien position | Lenders may set different score or equity requirements for different transactions |
Equity and combined loan-to-value ratio
Many lenders limit total mortgage debt to 80% to 85% of your home’s value, though some programs differ. You may need to retain at least 15% to 20% equity after closing.
Use this formula to estimate your combined loan-to-value ratio:
- CLTV = (current mortgage balance + new home equity loan amount) ÷ current home value × 100
For example, if your home is worth $400,000, you owe $250,000 on your first mortgage, and you want a $50,000 home equity loan, your total mortgage debt would be $300,000, resulting in a 75% CLTV.
For more detail, see our guide to home equity loan requirements.
Debt-to-income ratio
Your DTI compares your required monthly debt payments with your gross monthly income:
- DTI = total monthly debt payments ÷ gross monthly income × 100
Many lenders prefer a DTI in the low 40% range, but each sets its own limits. Some may accept a higher ratio if the application is otherwise strong, while others may require a lower ratio for weaker credit or less equity. Do not assume 43% is a universal cutoff for every lender and loan.
Our home equity loan DTI and credit requirements guide explains how lenders calculate this ratio.
Getting a home equity loan with bad credit
Lenders define bad credit differently. FICO classifies scores below 580 as poor, but borrowers may use the term more broadly when they fall below the credit score needed for a home equity loan.
You may qualify for a home equity loan with bad credit, but your options can narrow significantly below 620. Some specialty lenders may consider scores near 600 if you have substantial equity, income, payment history, and other compensating factors. However, if you have poor credit, expect higher rates, smaller loans, or a requirement to retain more equity.
These steps may improve your chances of qualifying for a home equity loan with bad credit:
- Request a smaller loan. A smaller loan lowers your CLTV and leaves more equity in the property.
- Reduce monthly debt payments. Paying off an installment loan or reducing other required payments may lower your DTI.
- Pay down credit card balances. Lower balances may help both your credit utilization and your DTI, depending on the resulting minimum payments.
- Compare lender requirements before applying. Begin with lenders that publish minimum credit score requirements. Ask if prequalification uses a soft or hard credit inquiry, then select the lender that best fits your needs.
- Consider waiting if the offers cost too much. Raising your score before borrowing may qualify you for more lenders or better pricing.
Substantial equity or a low DTI may help if you meet basic requirements, but neither ensures approval with a low credit score. Avoid companies that promise guaranteed approval regardless of credit. Remember: home equity loans use your home as collateral, so missing payments could result in foreclosure.
How to improve your credit before applying
No legitimate method can guarantee a specific score increase or timeline. Creditors update account information at different times, and scoring models weigh report data differently. Our guide to raising your credit score covers the steps below in more detail.
Focus on the parts of your credit profile you can control:
- Review all three credit reports. You can request free weekly reports from Equifax, Experian, and TransUnion at AnnualCreditReport.com. While reports may not show the exact score a lender will use, they reveal the underlying information. Use them to identify issues before applying.
- Dispute actual errors. Contact both the credit reporting company and the business that supplied incorrect information. The Consumer Financial Protection Bureau explains the dispute process.
- Make all payments on time. FICO gives payment history the most weight in its scoring. Set reminders or automatic payments to avoid missed due dates.
- Reduce revolving balances. Credit scoring models compare your card balances to your available limits. Paying down balances lowers your utilization ratio and saves interest.
- Limit new credit applications. New accounts and hard inquiries can impact your score. Avoid financing large purchases shortly before applying for a home equity loan.
- Consider carefully before closing a credit card. Closing reduces your available credit and may increase your utilization ratio. Keep credit cards open if they have no significant fees and you can manage them responsibly.
HELOC vs. home equity loan credit score requirements
When comparing HELOC vs. home equity loan credit score requirements, do not assume one product accepts lower scores. Lenders typically require scores between 620 and 680 for both, though some HELOC lenders may accept scores near 600, while others require higher scores.
Choose between home equity products based primarily on how you need to borrow and repay the money.
HOME EQUITY LOAN | HELOC | |
|---|---|---|
Credit score requirement | Set by the lender; 620 or higher is a common starting point | Set by the lender; published minimums can range from about 600 into the upper 600s |
How you receive funds | One lump sum at closing | A revolving line that you draw from as needed |
Interest rate | Usually fixed | Usually variable, although some lenders offer fixed-rate options or conversions |
Payments | Scheduled principal-and-interest payments | Payments depend on the amount drawn, rate, and repayment stage |
Common use | One expense with a known cost | Ongoing or unpredictable expenses |
Compare the product structures in our HELOC vs. home equity loan guide. You can also review current HELOC requirements.
Compare home equity loan offers
A score above a lender’s minimum does not tell you what the loan will cost. Request offers from at least three lenders and compare APR, interest rate, monthly payment, closing fees, loan term, approved amount, and any prepayment penalties.
Consider whether the payment fits your budget if your income decreases or expenses rise. Since the loan uses your home as collateral, borrow only what you can repay without relying on future credit.
Time to make a move? Let us find the right mortgage for youFAQs about minimum credit score for home equity loans
Can I get a home equity loan with a 600 credit score?
Yes, some specialty lenders may consider a 600 credit score, but most home equity lenders require 620 or higher. Current requirements at large lenders range from 640 to 680. Expect fewer options, and compare APR, fees, term, and monthly payment before using your home as collateral.
Does applying for a home equity loan hurt my credit score?
Yes, a formal application usually requires a hard credit inquiry, which may cause a small, temporary decrease in your score. Some lenders use a soft inquiry for prequalification, so ask before authorizing a check. Credit scoring models typically treat multiple mortgage inquiries within a 14- to 45-day period as one inquiry.
What credit score gets the best home equity loan rate?
No single score guarantees the best rate. Scores of 700 or higher may qualify for better pricing, while some lenders require 730 or 740 for their most competitive offers. Your CLTV, DTI, loan amount, term, property, and lender also affect your rate.
How much equity do I need for a home equity loan?
Many lenders require you to retain at least 15% to 20% equity, which means a maximum CLTV of about 80% to 85%. Some programs allow a higher CLTV, while others require more equity.
