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Best HELOC Lenders for Bad Credit

July 2024

Bad credit can make it a challenge to get a HELOC, even if you have built a lot of equity in your home. These are the best HELOC lenders for homeowners with poor credit.
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Having less than ideal credit will make it hard to qualify for a home equity line of credit. Depending on the lender and other considerations, you may get approved for a HELOC even with bumpy credit history. Generally speaking, most lenders will still require a credit score in the 600s. If you have very bad credit, you'll probalby need to look at other options.
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HELOC alternatives

Home equity lines of credit and home equity loans are, on average, the home equity financing options with the highest minimum credit score requirements. There are exceptions (see the list above), but most HELOC lenders will only consider borrowers with a credit score above 680. Notice that although it is possible to get approved for a HELOC with bad credit, it might not be the best financial option for you.
So, if you are not getting approved for a HELOC or you only qualify for high interest rates, you may want to consider other home equity financing products, such as shared equity agreements or cash-out mortgage refinancing.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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Getting a shared equity agreement is probably the easiest option for homeowners with bad credit. However, it's very possible that you have never heard of them, since they are a relatively new type of home equity financing. Some shared equity investors will consider homeowners with credit scores as low as 500 and most don't care that much about your debt-to-income or loan-to-value ratios.
The best thing about shared equity agreements is they don't require getting into debt or making monthly payments. This is because instead of borrowing money you're actually selling a slice of the future equity of your home. When your home is sold (or when the contract term ends), the investors receive their share from the sale. If the value of the house increases, so does the amount the investor receives. If the house drops in value, the investor also shares in the loss.

SuperMoney may receive compensation from some or all of the companies featured, and the order of results are influenced by advertising bids, with exception for mortgage and home lending related products. Learn more

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A cash-out mortgage refinance can help you get back on track financially, but it can also increase the cost of your entire mortgage if you refinance with a higher interest than your current mortgage. In general, cash-out refinancing is best avoided unless you can qualify for a lower (or the same) interest rate.

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