HELOC With Bad Credit: Best Lenders and How to Get Approved
It is possible to get a HELOC with bad credit. Most home equity lenders prefer 620 to 680 credit scores, but lenders like Achieve approve HELOC borrowers with credit scores as low as 600.
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- You can get a HELOC with bad credit, but you should expect stricter eligibility requirements and higher interest rates.
- You’ll likely need more home equity (often 15% to 25%) to qualify.
- HELOCs are best for those with flexible borrowing needs, not one-time expenses, but they can strain your budget when their interest rates begin to adjust.
The best home equity lenders for bad or fair credit in 2026
| Lender | Credit score minimum | Available equity loans |
|---|---|---|
 | 600 | HELOCs (fixed- and variable-rate) No home equity loans |
 | 620 to 640 | HELOCs Home equity loans |
 | 620 | HELOCs Home equity loans |
 | 640 | HELOCs (fixed- and variable-rate) Home equity loans |
 | 660 | HELOCs (fixed- and variable-rate) No home equity loans |
Best HELOC lender for bad credit: Achieve
Achieve sets the lowest credit score minimum of all the lenders we reviewed, requiring only a 600 score to access up to $700,000 using a fixed- or variable-rate HELOC. It doesn’t offer a traditional home equity loan, but its fixed-rate HELOC functions similarly to a home equity loan while retaining the ability to repay and reuse the funds you’ve borrowed during the draw period.
Achieve is also a good choice for those who want to close quickly, as they advertise the ability to get your funds to you within five to seven days of approval. However, its home equity products aren’t available in Alaska, Connecticut, Delaware, Hawaii, Maine, Massachusetts, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New York, North Dakota, Rhode Island, South Carolina, South Dakota, Virginia, Vermont, West Virginia and Wyoming.
Read more in LendingTree’s full Achieve Mortgage review to see if this lender is a good fit for you.
Best home equity loan lender for bad credit: New American Funding
New American allows you to apply online, but it also operates more than 300 brick-and-mortar locations and can issue loans in all 50 states, the District of Columbia and Puerto Rico. That means convenient access to funds in whatever way suits you best.
New American offers both home equity loans and HELOCs, but doesn’t have a fixed-rate HELOC product like some of the other lenders in this list.
Read more in LendingTree’s full New American Funding review to see if this lender is a good fit for you.
Best VA home equity lender for bad credit: Navy Federal Credit Union
Best home equity lender for fair credit: Spring EQ
Spring EQ has something for everyone, even those with credit scores as low as 640. The lender offers fixed- and variable-rate HELOCs as well as home equity loans, and gives you the option to make interest-only payments during the draw period of its HELOCs.
For those who may want to pay off a loan early, Spring EQ is a safe choice: they don’t charge prepayment penalties.
Read more in LendingTree’s full Spring EQ review to see if this lender is a good fit for you.
Runner-up HELOC lender for fair credit: Bank of America
Bank of America offers variable-rate HELOCs with the option to convert up to 90% of that credit line into a fixed-rate loan. It doesn’t offer traditional, fixed-rate home equity loans.
For the price-conscious, Bank of America offers several discounts including a special introductory interest rate that lasts six months, which as of this writing is more than 2.5 percentage points lower than the variable APR that kicks in after the intro period. Plus, you can get discounts for things like setting up autopay from a Bank of America account, owning the home that secures the HELOC outright or drawing at least $10,000 when you open the account.
Read more in LendingTree’s full Bank of America Mortgage review to see if this lender is a good fit for you.
Read more about how LendingTree experts chose the best lenders for bad credit below.
Requirements for a HELOC with bad credit
| Typical HELOC requirement | What to expect with bad credit | |
|---|---|---|
| Credit score minimum | 620 to 680 (varies by lender) | If you can show that your low credit score is due to a one-time hardship, you may be able to get approved even with a low credit score. |
| DTI ratio maximum | 43% to 50% | A lower debt-to-income (DTI) ratio can give you better odds of being approved. A higher DTI may cause lenders to set higher credit score minimums or lower LTV maximums. |
| Home equity minimum | 15% to 20% (80% to 85% maximum LTV ratio) | Lenders may cap your borrowing at a lower loan-to-value (LTV) ratio, which means you’ll need more equity than borrowers with higher credit scores. |
Before getting a HELOC, you should determine whether a HELOC will actually help you financially. HELOCs for bad credit usually come with trade-offs like higher interest rates, smaller credit limits and stricter minimum equity requirements.
If your credit is already stretched, those trade-offs can be hard to absorb.
Shopping around is a must, especially when you have bad credit. The interest rate, credit limit and terms you’re offered may differ significantly from one lender to another. This is especially true for second mortgages, and once your HELOC rate adjusts, even a small difference in your variable rate can have a big impact on your monthly payments.
LendingTree is a free, safe, and secure way to quickly compare rate quotes from a network of vetted home equity lenders.
According to 2025 LendingTree data, borrowers that use LendingTree to compare offers can save $60,000+ over the life of a 30-year loan.
When banks compete, you win.
Get started by filling out our form below to see competitive home equity rate offers today.
How to get approved for a HELOC when you have bad credit
1. Focus on lowering your credit utilization
One of the fastest ways to improve your credit score before applying is to reduce how much of your available credit you’re using.
- Aim to keep your credit utilization below 30%, but ideally much lower.
- To truly maximize your score in the short term, completely pay down all of your open credit lines except one. Leave a very small balance (around 1% of its limit) on that last card or credit line. (This is sometimes called the “all zeros except one” strategy.)
2. Avoid new credit applications before applying
Applying for new credit can temporarily lower your score and raise red flags for lenders.
- Avoid applying for new loans or credit cards for at least 30 to 60 days before applying for your HELOC.
- Multiple recent inquiries can make you look like a higher-risk borrower.
3. Check your credit report for errors
Mistakes on your credit report can drag down your score, and they’re more common than you might think.
- Look for incorrect late payments, balances or accounts you don’t recognize.
- Disputing errors can sometimes result in a quick score improvement.
4. Build compensating strengths
If your credit score isn’t ideal, lenders will look for other signs of financial stability. You can strengthen your application by:
- Increasing your home equity. You can do this by paying down your primary mortgage balance or, if you’re not in a hurry, making home improvements that will increase your home’s value.
- Showing consistent income and employment. A steady, high income can help reassure lenders that you’re not a risky person to lend to.
- Reducing overall debt. If there are any debts you can pay down before you apply for your HELOC, do it. A lower DTI ratio can help you access better interest rates and more forgiving credit score and LTV ratio requirements.
5. Shop with multiple lenders
As we’ve covered, HELOC requirements vary widely from lender to lender — and that’s especially for borrowers with lower credit scores. Comparing loan offers gives you the best chance to find a workable option, and potentially save thousands of dollars over the life of your credit line.
You can use LendingTree to submit your financial info once and receive quotes from multiple lenders.
When a HELOC with bad credit makes sense
- You’ve built up a decent chunk of home equity. If you’ve built up a sizable ownership stake in your home, lenders may be more willing to overlook a lower credit score.
- You’re using it to consolidate high-interest debt. Using a HELOC to pay off high-interest balances — like credit cards — could lower both your monthly payments and the total interest you pay over time.
- Your income is consistent. Reliable, predictable earnings make it more likely you’ll be able to keep up with your HELOC payments. That’s extremely important when your home is serving as the collateral.
- Your finances are in better shape now. If your credit score dropped because of a one-time event — for example, you lost your job but have landed safely in a new one — you may be in a better position to qualify now. Lenders look at your whole situation, not just your score.
When a HELOC is risky (especially with bad credit)
- You’re too focused on the initial payment amount. HELOC rates fluctuate, so while the initial payments may look appealing, it’s very likely they’ll rise once the rate starts adjusting.
- You’re consolidating debt without behavior change. If you use a new loan to consolidate debt without really understanding why you got into debt in the first place, you’re likely to repeat the cycle again — only this time you’ll be racking up new debt while already juggling two mortgage payments.
- You’re near your financial limit. If rates rise or your income changes, the added HELOC debt can quickly turn into a big financial strain, especially if you’re already on a tight budget.
- You plan to carry a large balance long-term. Many people who take out a HELOC have plans to pay off the balance or refinance before the draw period ends. If you expect to carry a large balance for years, a fixed-rate option like a home equity loan may offer more predictability and lower overall risk.
Avoid these misconceptions about HELOCs
Mistake 1: “It’s cheaper than a personal loan.”
While HELOCs are generally a cheaper way to borrow money than personal loans, the interest rate you’re quoted when you apply for a HELOC only represents what you’ll pay at the beginning of your loan term.
Once the interest rate begins to adjust, your payments could shoot up and the total interest you’ll pay over the life of the loan will follow suit.
Mistake 2: “I’ll just borrow what I need.”
Because you can borrow repeatedly during the draw period, it’s easy to build up a large balance over time rather than pay it down.
Take a realistic look at your ability to stick to a budget before assuming that you can limit yourself once you have a HELOC.
Mistake 3: “My payment will stay low.”
HELOC payments may be interest-only during the draw period, which allows you to enjoy artificially low monthly payments.
When a HELOC rate begins to adjust, payments can more than double once the draw period ends and you’re required to repay both principal and interest each month.
Alternatives to a HELOC with bad credit
If a HELOC isn’t the right fit, you may want to consider:
- Home equity loans, which come with more stable payments.
- Personal loans, which don’t require you to put your house at risk and offer options tailored to borrowers with bad credit.
- Debt consolidation loans, which can help you consolidate debt with fixed payments and no collateral requirements.
- Using a credit monitoring service like LendingTree Spring to help you improve your credit score.
See current HELOC rates on LendingTree and how they compare to other home equity options.
How LendingTree chose the best “bad credit” home equity lenders
We reviewed more than 40 mortgage lenders to identify which of them offer home equity lines of credit (HELOCs) and home equity loans. We then evaluated each lender based on the exact home equity (second mortgage) products they offer and the minimum credit scores they require. When multiple lenders shared similar credit score requirements, we prioritized those offering both HELOCs and home equity loans, broader geographic availability and more flexible repayment options. Minimum score requirements are based on lenders’ guidelines, but may vary due to individual borrowers’ circumstances.
LendingTree gathers data directly from lenders through their websites, disclosures and, in some cases, direct communication with company representatives. The LendingTree editorial team verifies and updates information periodically.
Our editorial team applies consistent criteria to every lender. Lenders cannot pay to influence our ratings. Read LendingTree’s editorial guidelines for more information.
Why trust LendingTree’s methodology?
As the lead editor for all purchase, refinance and home equity content, I rely on my 14+ years of personal finance experience to manage a team of staff writers and contributors who create consumer-friendly guides.
Together, our team aims to make LendingTree a reliable and helpful resource for readers as they navigate the complex mortgage lending process.
