What Credit Score Do You Need for a HELOC?
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Most HELOC lenders want to see a credit score of at least 620, and many prefer 680 or higher. Your score affects whether you could be approved and the rate you might pay. If your score isn't where you'd like it, there are steps you could take now to improve it before applying.
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You've built equity in your home. Now you're thinking about using it. But there's a question sitting in the back of your mind: is my credit score good enough? You don't want to apply, get denied, and take a hit to your credit for nothing.
Your credit score matters for a HELOC. The range lenders accept is wider than most people expect, though. Your score isn't the only thing on the table.
Knowing where your score stands puts you in a better position to decide whether now is the right time. And if it isn't, this article will help you figure out what to do next.
What is the minimum credit score for a HELOC?
Most lenders typically look for a credit score of at least 680. Some may consider applications with scores as low as 620.
There is no federal minimum credit score for a HELOC. Each lender sets its own standard.
In plain English: a 680 means most lenders will talk to you. A 740 puts you in the best-rate tier.
Why are lenders strict? A HELOC is a second mortgage. If the home goes into foreclosure, the primary mortgage lender gets paid first. The HELOC lender is second in line to be repaid. Let’s consider a worst-case scenario. Let’s say a foreclosure sale doesn’t bring in enough money to fully repay both lenders. The money goes to the primary mortgage lender first. If there isn’t enough, the HELOC lender doesn’t get repaid.
That's why credit score requirements for HELOCs tend to be higher than for primary mortgages.
Here's something worth knowing: the floor and the reality are different numbers. According to the Mortgage Bankers Association's 2025 Home Equity Lending Study, the average FICO Score among HELOC borrowers reached 771 in 2024. That's up from 760 the year before.
The minimum to apply is one number. The score of a typical approved borrower is another.
Here's how score ranges translate in practice:
| Score Range | Approval Likelihood | What to Expect |
|---|---|---|
| Below 620 | Unlikely at most lenders | Very limited options; build score first |
| 620-679 | Possible at some lenders | Higher rates; stricter terms; strong equity helps |
| 680-699 | Good odds | Approved by most lenders; rates improve |
| 700-739 | Strong position | Competitive rates likely; most lenders interested |
| 740+ | Best position | Best available rates and terms |
How your credit score affects your HELOC rate
Getting approved is one thing. The rate you pay is another. Your credit score shapes both.
HELOCs are typically variable rate. The rate is set as an index (usually the prime rate) plus a lender-set margin. In other words, the rate you pay might be “prime plus 2%.” The prime rate is the benchmark. The 2% is the margin.
Lenders use your credit score to set that margin. A higher score means a lower margin and a lower rate.
Here's what that looks like in real money.
For example, on a $50,000 HELOC balance, a 1% difference in rate could mean roughly $500 more in interest per year. A draw period can last up to 10 years, and repayment often runs another 10 to 20. That's a long time to pay more.
Moving from the high 600s into the 700s could shift you into a better rate tier. Even a modest improvement before you apply could help you save money over the long haul.
Read more: How often can HELOC interest rates change?
Other factors lenders look at besides your credit score
Your credit score is the starting point. But lenders look at the full picture.
Combined loan-to-value
Lenders generally limit the percentage of your home’s value that they want you to owe. This is expressed as the CLTV limit (the combined loan-to-value ratio).
Here's an example: Your home is worth $400,000 and the lender’s CLTV limit is 85%. That means that between your mortgage and the new HELOC you want, you could owe up to $340,000.
You still owe $200,000 on your mortgage. You could apply for up to $140,000 on your HELOC and still meet the lender’s CLTV limit.
Debt-to-income ratio
Most lenders typically look for a debt-to-income ratio of 43% or below. That's your total monthly debt and housing payments divided by your gross monthly income. It includes your mortgage payment, property taxes, homeowner’s insurance, and homeowner’s association dues, court-ordered spousal or child support, and the minimum payments on all of your debts. It doesn’t include variable expenses like utilities or groceries.
Your financial picture
Payment history matters. Lenders pull your full credit report, not just your score. Late payments are a red flag even with an acceptable score.
You'll also need steady, verifiable income. Stable earnings tell a lender you can handle the payments.
If your score is on the lower end, a strong showing on these other factors could sometimes help your application.
| Factor | Typical Requirement |
|---|---|
| Home equity | 15-20% minimum |
| CLTV | 80-85% maximum |
| DTI | 43% or below |
| Payment history | No recent late payments |
| Income | Steady, verifiable |
What to do if your credit score isn't where it needs to be
Here's exactly what to do first, before you apply.
- Check your credit report. Pull it for free from AnnualCreditReport.com. Free weekly reports are permanently available from all three bureaus. Do this before anything else.
- Dispute any errors. The CFPB recommends reviewing your report for errors and disputing anything inaccurate. Errors are more common than most people expect. Some people have errors that drag down their scores.
- Pay down revolving balances. Paying down your credit card balances could improve your credit score. Credit utilization is one of the biggest factors in your score. It’s your balance compared to your credit limit. Getting a card from 70% utilization to 30% could make an impact on your credit score.
- Don't apply for new credit accounts. New accounts reduce your average account age. Hard inquiries from new applications could signal risk. Inquiries and account age both affect your score. In the months before a HELOC application, stay put.
- If you're denied, get the reason. Lenders are required to provide a reason for denial. Use that feedback. Address the specific issue, then consider shopping with other lenders. Requirements vary meaningfully from one institution to the next.
How quickly your score moves depends on what's pulling it down. A lender or credit counselor can help you identify where to focus. Lenders are required to give you a list of HUD-approved counselors after you apply for a HELOC.
When it might make sense to apply even with a lower score
A score in the mid-600s doesn't automatically close the door. It depends on the rest of your picture.
We’ve seen online HELOCs available to borrowers with a 600 FICO Score or better, when the borrower is using the money for debt consolidation and they let the lender pay off their other creditors directly. Ask your lender if credit score requirements vary based on how you will use the funds.
Significant equity and a low DTI could give some lenders flexibility on credit score. Strong equity reduces the lender's risk.
Credit unions and portfolio lenders often have more flexibility than banks. They're worth seeking out if your score is borderline. Portfolio lenders keep loans on their own books rather than selling them. That gives them more room to set their own criteria. Credit unions may be able to make judgment calls that banks can’t, and they often hold their own loans, too.
The trade-off is real. Before applying with a lower score, calculate whether the rate you'd likely receive makes the HELOC worthwhile for your goal. A lower credit score could lead to higher monthly and overall costs. You might be able to save a lot of money if you’re able to bring your credit score up before you apply.
Check with multiple lenders. Getting prequalified with a soft pull won't affect your score. It gives you a clearer sense of where you stand before anything hits your credit report.
Bills Action Plan
- Pull your free credit report from AnnualCreditReport.com and check for errors. Dispute anything inaccurate with the credit bureau. Errors are common, and fixing them could improve your score before you apply.
- Calculate your home equity and CLTV before approaching any lender. Add your current mortgage balance to the amount you want to borrow. Divide the total by your home's appraised value. If your result is 80% or below, you can move to the next step.
- Shop at least three lenders. Requirements and rates vary significantly. A credit union or portfolio lender may offer more flexibility if your score is in the mid-600s. Getting prequalified with a soft pull won't affect your score, but it also won’t give you a firm offer. When you’re ready to apply, submit multiple applications within a two-week time period to minimize the effect on your credit score.
Key terms
HELOC (home equity line of credit): A revolving line of credit secured by the equity in your home. Withdraw as needed during a draw period (typically up to 10 years), then repay. A HELOC is a mortgage. If you are still paying down your primary mortgage, the HELOC would be your second mortgage.
Credit score: A number from 300 to 850 that summarizes how reliably you've managed credit accounts in the past. FICO and VantageScore are the types of scores most commonly used by lenders.
Combined loan-to-value ratio (CLTV): All loans on your home divided by its appraised value. Most HELOC lenders cap CLTV at 80 to 85%.
Debt-to-income ratio (DTI): Your total monthly debt and housing payments divided by your gross monthly income. Most HELOC lenders look for 43% or below.
Draw period: The phase when you can borrow from the HELOC. Typically lasts up to 10 years.
Repayment period: The phase after the draw period ends. Often runs 10 to 20 years.
Variable rate: A rate that can change over time. HELOC rates are typically tied to the prime rate plus a lender-set margin.
Can I get a HELOC with a 620 credit score?
Some lenders may consider a HELOC application with a 620 score. Approval at that level is less certain. Also, applicants with lower scores are typically offered lower interest rates and possibly lower loan limits. Having significant equity and a low DTI could improve your odds. Credit unions and portfolio lenders tend to be more flexible than large national banks.
What credit score do I need for the best HELOC rates?
Most lenders reserve their best rates for borrowers with scores of 740 or higher. Moving from the high 600s into the low 700s could put you in a better rate tier. When you prequalify, ask the lender what credit score you would need to get the next lower rate. For example, if you have a 670, would you get a better offer if you had a 680? That could tell you what you’re shooting for and how far you are from the goal.
Does applying for a HELOC hurt my credit score?
Yes, a HELOC application typically triggers a hard inquiry on your credit report. A single hard inquiry could lower your score by a few points. That impact fades within about a year. The inquiry itself remains on your report for two years.
If you shop with multiple lenders, submit your applications within a short window. Credit scores don’t penalize you for smart shopping. HELOCs are mortgages. You can apply with one mortgage lender or one hundred, and they’ll all count as a single inquiry where your score is concerned. But to get that single-inquiry benefit, you have to submit your applications within two weeks. Some credit scores allow up to 45 days, but you won’t know which kind of credit score each lender plans to look at.
What disqualifies you from a HELOC?
Several factors could result in a denial. Insufficient equity is a common disqualifier, as is a high DTI. Lenders review your full credit report. Recent bankruptcies, foreclosures, or a pattern of late payments are all red flags. Unstable or unverifiable income is another frequent reason for denial. And if you don’t meet the lender’s minimum credit score requirement, you could be turned down. If your application is denied, the lender is required to provide a reason. Use that feedback before applying again.
7 Comments
If you pay down the HELOC, you don't need to close it, as keeping the account open helps your score.
It is not clear to me why your score is not rising, given the fact that it has been two years since your last derogatory mark. I wonder if it has anything to do with the approximately $9,000 in debt that you did not specify. You are wise to keep the number of inquiries to a minimum. Keep in mind that while all inquiries show on your report, ones that are made within a two week for the same product count as only one inquiry against your score.