Need help getting a HELOC with bad credit? Read along for more information on how to get approved for this loan. 

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How to Get a HELOC With Bad Credit | EasyKnock

Need help getting a HELOC with bad credit? Keep reading to learn your options.

If you’re a homeowner looking to pay down high interest debt or finance home renovations, there are always options whether you are paying to mortgage lenders or non QM lenders. 

For example, you can convert some of your home equity into cash with the help of a home equity line of credit (HELOC). A HELOC can help you pay for ongoing expenses such as home renovations or monthly bills. However, those with poor credit history may worry about their options.

If you’re wondering if you can get a HELOC with bad credit, there’s good news. It’s possible, although a little more challenging. 

Below, we’ll explain how you can boost your chances of getting a HELOC loan with bad credit. We’ll also discuss other ways you access cash through your equity.

So, can you qualify for a HELOC? You may be able to, but it depends on a variety of factors. 

When you apply for a HELOC, your home equity lender will:

Review your credit score and credit history

As you can see, your credit score is a key part of the process, but it’s not the only factor that matters. 

What is the Minimum Credit Score for HELOC?

Most lenders require you to have a credit score of 620 or above to qualify for a HELOC. Some lenders have credit score requirements as high as 680. 

If you have a low credit score, you may still be able to find a lender that’s willing to work with you. You’ll just need to shop around for a flexible lender. 

You can increase your HELOC approval chances by ensuring the rest of your application is strong enough to make up for your poor credit score. 

To boost your chances of getting approved for a HELOC with bad credit, it helps to have:

A low debt-to-income ratio (well below the required 43% minimum)

A high-paying job that provides a reliable income

Even if you check all of these boxes, having a good credit score can make the application process much easier. It can also help you qualify for more favorable HELOC terms. 

For these reasons, you may want to wait a few months before you apply for a HELOC. During this time, you can do the following things to better your credit score, such as:

Disputing any errors on your credit report

Paying off debts that have gone to collection agencies

Holding off from applying for new credit for six to 12 months

Making all of your credit payments on time

If you have a friend or family member with excellent credit, you could also ask if they’re willing to add you as an authorized user on a credit account.

Even if you get approved for a HELOC with bad credit, the loan term may not be as great as you hoped. 

Borrowers with bad credit typically receive HELOCs with higher interest rates. If you’re pursuing a HELOC in hopes of securing a lower interest rate, you may be disappointed with your lender’s offerings. 

Additionally, you’ll have to take on the risk of potentially losing your home. A bad credit score often indicates that you’ve struggled to repay your debts on time in the past. When it comes to HELOCs, you don’t want to make this mistake. After all, defaulting on your HELOC payments can end in foreclosure. 

Fortunately, a HELOC isn’t your only option for borrowing money with bad credit. You can also look into:

Home equity loans – If you are wondering if you can access your home equity with bad credit, the answer is yes. A home equity loan lets you borrow money from your equity in a lump sum. Home equity loans have a fixed rate and loan terms of 10 to 20 years. 

The credit score requirements for home equity loans are similar to those for HELOCs. If you have bad credit, some lenders may approve your application, but you’ll have to fulfill additional requirements.


Sale-leaseback programs – A great alternative for homeowners with bad credit is a sale-leaseback program. These programs let you access your home equity without filling out any loan applications, paying costly interest fees, or moving out of your home. All you have to do is sell your home and lease it back from the buyer.


Cash out refinancing – With a cash out refinance, you replace your current mortgage with a new mortgage for a larger amount. You can pocket the difference in cash to use towards personal expenses. 

To qualify for a cash-out refinance, you generally need at least 20% equity in your home and a credit score of 620 or above. However, the credit score requirements can be a little more flexible than with a home equity loan or HELOC. 
Just keep in mind that refinancing your mortgage will adjust all of its terms. You may end up with a much higher interest rate and monthly payment amount than you have right now due to your bad credit score. 

Unsecured personal loans – Unsecured personal loans let you borrow money without putting up any collateral. They come with shorter loan terms, fixed interest rates, and smaller loan amounts than HELOCs. 
Unsecured personal loans often have a higher interest rate than their equity-backed counterparts.
As with HELOCs, most lenders require you to have a good credit score to qualify for a personal loan, though some lenders create personal loans specifically for borrowers with bad credit. 


Reverse mortgages – If you're 62 or older and have over 50% equity in your home, you may qualify for a reverse mortgage loan. It lets you borrow money from your home equity in a lump sum, revolving line of credit, or monthly payment schedule. 
With this form of financing, you don’t need to repay any money you borrow until you sell your home or pass away. As a result, your mortgage balance will increase over time.
Fortunately, there’s no minimum credit score requirement to qualify for a reverse mortgage. However, a reverse mortgage may not be a viable option if you plan to move out of your home in the future or leave your home as an inheritance. 


When you need to borrow money, a bad credit score can significantly limit your options. Even if you get approved for a HELOC with bad credit, it may not be the best choice for your financial health due to the less favorable terms you’ll receive.  

Whether it’s because you’re trying to access home improvement loans with bad credit or need a HELOC to pay off debt, EasyKnock doesn’t have any credit score requirements. Instead, our sale-leaseback solution helps you unlock your equity so that you can meet your financial goals, whether they entail buying a vacation home or enjoying your retirement. You sell us your home and lease it back for as long as you want. In the meantime, you have access to your home’s equity.

Can You Get a Bridging Loan With Bad Credit?

This article is published for education and informational purposes only. This content is based on research and/or other relevant articles and contains trusted sources, but does not express the concerns of EasyKnock. Our goal at EasyKnock is to provide readers with up-to-date and objective resources on real estate and mortgage-related topics. Our content is written by experienced contributors in the finance and real-estate space and all articles undergo an in-depth review process.

Bankrate. What to know before your HELOC draw period ends. 
https://www.bankrate.com/home-equity/heloc-refinance-draw-period-ends/

Bankrate. Home Equity Line of Credit (HELOC) Rates in June 2021. 
https://www.bankrate.com/home-equity/heloc-rates/

U.S. News. Average Credit Card APR. 
https://creditcards.usnews.com/articles/average-apr

Bankrate. Requirements for a home equity loan or HELOC in 2021. 
https://www.bankrate.com/home-equity/requirements-to-borrow-from-home-equity/

Experian. Is a Reverse Mortgage Right for You?
https://www.experian.com/blogs/ask-experian/how-does-a-reverse-mortgage-work/

As a homeowner, you make your monthly mortgage payments and maintain your property, just like you’re supposed to. But what does equity really mean? Read about where your money is going and how you're benefitting in the long run. 

So you’re officially a homeowner. You make your monthly mortgage payments and maintain your property, just like you’re supposed to. But what does that all really mean? Where is your money going and how are you benefitting from this in the long run? 

All of it comes down to equity. It’s a term everyone may know and may think they understand. But let’s break it down further. How do you determine how much equity you have? What does it do for you? How do you get more or use what you have to your advantage? 

To put it simply, equity is the difference between what you owe on your mortgage and what your home is currently worth. 

For example, if you purchase a home worth $200,000 with a 20% down payment and a mortgage covering the remaining $160,000, that means you still owe $160,000 on your mortgage but have that you have $40,000 in equity. If the house’s market value remains constant over the next two years, and you make $5,000 of mortgage payments, you would have $45,000 in home equity at the end of the two years.

Maybe your home’s value jumped up to $210,000 in those two years. That would mean you now have even more equity as $210,000 minus $160,000 is $50,000. Meaning your equity increased to $50,000. 

If your home value should decrease, however, then that could work against your equity. If after two years, your home is now worth only $195,000, that would mean you now only have $35,000 in equity. 

The only way to get an official home value is to have a real estate appraiser come into your house and determine what your home is worth in the current market. 

Otherwise, you can get an estimate of your home’s value by looking at home sales of comparable houses in your area. You can also check with online real estate sales that provide their own estimates. These valuations are not always reliable but can help give you a rough idea of your home’s worth.

Monthly mortgage payments are the sure-fire way to boost your equity. However, if you’re looking for a way to make a bigger impact in a quicker time, there are a number of ways you can do that.

Make a big down payment: Your down payment is your initial kick-off into your equity and the higher the amount you put down, the more equity you’re building. Be sure to take your savings and income into consideration when deciding on an amount so you’re not stretching yourself too thin financially.

Make higher payments: By paying a higher amount toward your mortgage, you’ll boost your equity faster than if you are only paying a minimum amount. You can do this by changing your payments to bi-weekly, increasing your monthly payment amounts, and/or by putting any extra funds you may come across into your mortgage payments when you have them.

Make home renovations: A great way to boost your home’s value is by making significant, positive changes to the property. Some options are adding an extra bedroom, updating a kitchen, adding a bathroom, or increasing the curb appeal with some landscaping.

Your equity can be used as your financial safety net. However, since home equity is not a liquid asset, converting it to cash to use for other things is often a costly and complex process that, until now, came in limited options. To access equity, homeowners generally have two options.

Costs are usually 7% of the home value. 

Strict requirements regarding credit score, job type, and debt to income 

Higher interest rates than the average mortgage

25% of Americans do not qualify for any option

Now there is a third option. EasyKnock now offers a way to convert home equity to cash so that it can work for them and their goals.

EasyKnock uses a solution called a sale-leaseback. This means you sell your home to EasyKnock, converting your equity into cash while staying in your home as a renter. You don’t have to worry about qualifying for a loan or moving out. Now you can pay off debts, afford costly home renovations, fund a business venture, and so much more by choosing EasyKnock. Here are a few benefits of choosing EasyKnock:

No hard income, credit, or DTI requirements

Personalized solutions based on your timeline and financial needs

EasyKnock is making home equity easy to understand and even easier to convert to cash to help you reach your goals without the stress of loans or moving.

Hoping to renovate your house but don't have the funds or the credit score to get a loan? Discover your options for bad credit home repair loans.

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How to Get Home Improvement Loans with Bad Credit | EasyKnock

Hoping to renovate your house but don't have the funds or the credit score to get a loan? Keep reading to discover your options for bad credit home repair loans.

Your home is your most significant investment—and repairs, maintenance, and renovations are an inevitable part of maintaining that asset. Renovating your home can help increase its value and improve your quality of life, too—but it can also be quite costly.

A potential solution is a home renovation loan, which alleviates monetary limitations for those who don’t have the cash on hand for an expensive project. However, one of the first things an online lender or any type of lender will look at for home improvement financing is your credit score. 

If you have bad credit, we have you covered. Read on to learn more about how to navigate home improvement loans with bad credit, as well as some of the alternative options available to you. 

The Challenge of Getting a Home Improvement Loan With Bad Credit

A bad credit score is typically considered to be below 670 on a scale of 300-850.

At least 42% of Americans have a credit score below 700, which means nearly half of the country may be labeled a “subprime borrower” by lenders, meaning they’re unlikely to repay loans due to bad credit and poor payment or credit history. As such, those with bad credit may have a difficult time obtaining loans.

For those who fall in the 42%, do not lose hope of financing a renovation—you can still consider a home improvement loan as a financing solution. But first, you must consider whether it’s the right solution for you and your specific financial situation.

A home improvement loan is a type of personal loan that typically must be paid back over a period of three to five years. Luckily, unlike a mortgage or reverse mortgage, home improvement loans do not require collateral, meaning you won’t have to put your home at risk when obtaining the loan. 

Home improvement loans for bad credit can be as little as $1,000 or as much as $50,000 depending on your ability to repay, which is determined by a lender after viewing your payment or credit history. The monthly installment payments will remain consistent over the payment period, assuming you do not encounter additional fees or penalties.

Loans can be a great way to manage the large cost of a repair or renovation project, but they do require borrowers to meet certain standards when they pull your credit report, including your credit score.

What Credit Score is Needed for a Home Improvement Loan?

When considering how to get a home improvement loan with poor credit, remember that major lenders typically give preference to borrowers with less risk, meaning those with high or excellent credit scores who have a consistent and proven record of paying back loans, whether it’s a mortgage or a credit card statement. Credit risk can also be assessed through income, education, and the loan’s specific conditions. 

It’s much easier for borrowers to secure a loan approval if they have a credit score of 700 or higher. However, some lenders will provide loans to individuals with a credit score as low as 580. These lenders specifically appeal to those with a fair or poor credit score, although these types of loans may have more limitations.

Can You Get a Home Improvement Loan With a 500 Credit Score?

The vast majority of private lenders will not provide a private loan to borrowers with a credit score of 500. 

However, there might still be another loan option for those in this situation: Instead of asking how to get a renovation loan with bad credit, think about how you could convert your existing home equity into cash for additional funding.

How to Get a Home Improvement Loan With Bad Credit

If you have bad credit and are unable to acquire a home improvement loan, you can explore other financing options where you might secure a loan approval, including:

Home equity loans – These types of loans allow homeowners to borrow a lump sum against the equity of their home. Borrowers will acquire a fixed amount of funds, which must be paid with an equal monthly payment over a fixed repayment term or loan term. You’ll need a credit score of at least 620 to qualify for a home equity loan for remodel, though it may differ depending on the lender.


Home equity line of credit – Like a home equity loan, a line of credit allows a borrower to borrow against the equity of their home. However, unlike a home equity loan, borrowers will not receive a lump sum payment. Instead, borrowers can take out money against a credit limit and must make the repayments before taking out more. Most lenders with a HELOC loan offer require a credit score of 680 or more to qualify. 


Reverse mortgage – A reverse mortgage loan is only accessible to borrowers who are 62 or older. Essentially, senior homeowners can convert their home equity into cash income without the need to make loan payments. A minimum credit score is not required to qualify for a reverse mortgage.


Sale-leaseback: If you’re looking for a unique financing option that eliminates the hassle of acquiring home improvement loans for poor credit, look no further. In a sale-leaseback arrangement, a homeowner sells their home to a company that leases it back to you in one transaction. The sale allows you to convert your home equity into cash while the lease allows you to remain in your home. 


The Smart Way to Fund Your Home Improvements

Acquiring a home improvement loan with bad credit can be difficult, although not impossible. If you find the correct lender, you and your home can both be the picture of abundance. However, there are also many alternative solutions to fund your home renovation.

If you have bad credit, one of the easiest alternatives to a home improvement loan is a sale-leaseback solution with EasyKnock. 

We buy your house. You get the money you need. With our program, you can pay off debt, avoid the hassle of moving, and pay off overdue credit card bills to work your way toward a better credit score. 

At Easyknock, we work with you to meet your unique financial and homeownership needs. 

Whether you have below-average credit or you are just looking for a financing solution with fewer restrictions, consider a sale-leaseback solution from EasyKnock and reach out today. 

Credit.org. What’s a Good Credit Score? Credit Score Ranges Explained.
www.credit.org/blog/what-is-a-good-credit-score-infographic/

Statista. Home improvement market size in the United States from 2008 to 2024. 
www.statista.com/statistics/239753/total-sales-of-home-improvement-retailers-in-the-us/

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