Little girl in blue and white dress staring on driveway of home with rainbow shining above

What Is The Minimum Credit Score For A Home Equity Loan?

April 17, 2024 4-minute read

Author: Kara Porter


Unlocking the potential of your home's equity can be a game changer for achieving your financial goals. However, there is a minimum credit score requirement for home equity loans, so knowing where you stand in terms of your credit is important.

Whether you want to renovate your home or pay for your education expenses, your three-digit score plays a crucial role in shaping your borrowing options.

What Is A Home Equity Loan?

A home equity loan, also known as a second mortgage, is a popular forms of borrowing for homeowners. It’s a way for them to benefit from the value of their property and use it to access funds. This type of loan requires the borrower to have a significant amount of equity in their home, which is the difference between the home's appraised value and the amount owed on the mortgage. One of the primary advantages of a home equity loan is that it typically comes with a lower interest rate than other types of loans, such as personal loans or credit cards. This is because the loan is secured by the home, which reduces the risk for the lender.

Another benefit of a home equity loan is that the funds can be used for any purpose. Unlike a mortgage, which is used to purchase a home, a home equity loan can be used to fund anything from home improvements and debt consolidation to a child's education.

It's important to note that a home equity loan is not the same as a home equity line of credit (HELOC). While both allow homeowners to borrow against their home's equity, a HELOC is a revolving line of credit that works more like a credit card, while a home equity loan is a lump sum payment with a fixed interest rate and repayment term.

A home equity loan can be an excellent option for homeowners who need access to funds and have sufficient equity in their homes. But they’ll need to qualify for it. That includes meeting the minimum credit score required.

See What You Qualify For


Type of Loan

Home Description

Property Use

Your Credit Profile

When do you plan to purchase your home?

Do you have a second mortgage?

Are you a first time homebuyer?

Your email address () will be your Username.
Contains 1 Uppercase Letter
Contains 1 Lowercase Letter
Contains 1 Number
At Least 8 Characters Long
Go Back


By submitting your contact information you agree to our Terms of Use and our Privacy Policy, which includes using arbitration to resolve claims related to the Telephone Consumer Protection Act.!

NMLS #3030
Rocket Mortgage Logo

Congratulations! Based on the information you have provided, you are eligible to continue your home loan process online with Rocket Mortgage.

If a sign-in page does not automatically pop up in a new tab, click here

Rocket Mortgage Logo

What Credit Score Is Required For A Home Equity Loan? 

When it comes to getting a home equity loan, the credit score requirements can vary depending on the lender. While some lenders may approve a borrower with a minimum credit score of 620, others may prefer a higher score of around 680. Having a higher credit score can offer better rates and terms. This is because a higher score indicates better creditworthiness and lower risk for the lender. In addition to credit score, lenders may also consider other factors such as debt-to-income ratio and the amount of equity in the home. Therefore, it's a good idea to check with your lender about their specific requirements before applying for a home equity loan.

Getting A Home Equity Loan With Poor Credit

If your credit is below the minimum credit score requirement, you may not be able to acquire a home equity loan with bad credit. However, there are ways to increase your chances of approval. These include securing a co-signor and checking your credit report for errors that could be messing with your score. You can get a free copy of your credit report and score from all three bureaus once a year at If you cannot qualify, you may have to consider other types of loans, like a personal loan, which will come with a higher interest rate.

If you need to increase your score to qualify for the loan or receive better terms, follow these strategies:

  • Make all payments on time and for at least the minimum amount.
  • Avoid taking out new loans, which will lower your average credit age and require hard credit pulls – both of which lower your score.
  • Pay off some debt to lower your credit utilization.

Take the first step toward the right mortgage.

Apply online for expert recommendations with real interest rates and payments.

Additional Home Equity Loan Requirements

When applying for a home equity loan, lenders consider more than just your credit score. They assess several other factors to evaluate your ability to manage the loan responsibly and minimize risks for the lender. Some of the additional requirements that you should consider include:

  • Debt-to-income ratio (DTI): Keeping your debt-to-income ratio (DTI) in check is necessary. DTI is the percentage of your monthly income that you use to pay debts. Lenders consider it a crucial factor when assessing your creditworthiness. A healthy DTI can indicate that you’re financially stable and can take on additional debt.
  • Equity in your home: Lenders take into account your home equity when evaluating your loan request. Home equity is the difference between the current market value of your property and the remaining balance on your mortgage. You must have a certain amount of equity (typically 10%-20%) in your home to borrow against it. In addition, the more home equity you have, the greater your borrowing potential may be.
  • Credit History: Lenders consider your credit score an essential aspect of your loan application. However, your credit history also plays a vital role in determining your eligibility for a loan. Past bankruptcies or foreclosures can impact your credit history, which reflects your financial responsibility and reliability as a borrower. A clean credit history can enhance your credibility and strengthen your loan application, potentially leading to more favorable loan terms and interest rates.

The Bottom Line

If you're thinking about applying for a home equity loan, it's important to note that most lenders require a minimum credit score of 620. Yet, some lenders may demand a higher score, usually around 680. On a positive note, if you qualify for this loan, the interest rates for home equity loans will likely be lower than rates for something like a personal loan. That's because your home serves as collateral, which makes the loan less risky for the lender. Nevertheless, depending on where you are in your credit journey, there are various ways to improve your credit score and increase your chances of approval. If you have a good credit score and are considering applying for a home equity loan, you can apply with Rocket MortgageⓇ today.

Kara Porter Headshot

Kara Porter

Kara T. Porter is a freelance writer from Southern University and A&M College, earning her B.A. in Mass Communications. You can connect with her via her Linked In