What credit score do I need for a home equity loan?

Most lenders want a credit score of at least 620 for a home equity loan, and many prefer 680 or higher for the best pricing. A lower score can still work with some lenders, but you should expect a higher rate, a lower borrowing cap, or both.

Credit score is only one of four things a lender weighs. Your equity, your debt-to-income ratio, and your income matter alongside it, and a strong showing in the others can offset a middling score.

What is the minimum credit score for a home equity loan?

Around 620 is a common floor, though it varies by lender and program. Some lenders set their minimum higher, and a few specialty lenders go lower. Because there is no single industry-wide number, the same score can be a decline at one lender and an approval at another.

What score gets me the best rate?

Generally 680 and up starts to unlock better pricing, and 740 or higher tends to reach the strongest tier. Lenders price in tiers, so moving from one band to the next can lower your rate even if your score was already acceptable. The exact breakpoints differ by lender.

What else do lenders look at besides my score?

Three things carry real weight. Your equity, since the loan has to fit under the combined loan-to-value cap. Your debt-to-income ratio, which shows whether you can absorb the new payment. And your income and its stability. A borrower with strong equity and low debt can sometimes qualify with a score that would otherwise be borderline. To see how the equity piece works, read how much of your equity you can borrow.

Can I get a home equity loan with a lower score?

Yes, in some cases, though the terms tighten. Lenders who accept lower scores usually offset the added risk with a higher rate or a lower CLTV cap. This is where working with a broker helps, because the file can be matched to a lender whose guidelines fit it. As Emmett Clark, licensed in 18 states with access to more than 240 wholesale lenders, I regularly place files that a single lender would turn away.

How can I improve my score before applying?

Focus on the things that move a score fastest. Pay down revolving credit card balances to lower your utilization, avoid opening or closing accounts right before applying, and make sure every payment reports on time. Pulling your own report first to catch and dispute errors can also help, since a single reporting mistake can cost you a pricing tier.