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

Summary

The lenders that publish a number start at 640 to 680. Spring EQ says you can qualify with a FICO score as low as 640, U.S. Bank asks for 660 or higher, and Rocket Mortgage says a 680 or higher is typically needed. Meeting the floor is only the first cut, because the score also sets how much of your home's value you can borrow against and which rate you are offered.

A score of 680, 700 or 740 on the same house

Rocket Mortgage publishes its tiers in the fine print. A 680 minimum FICO allows a combined loan-to-value ratio of up to 80%, a 700 allows 85%, and a 740 allows 90%. Combined loan-to-value, or CLTV, is everything secured by the house divided by the value of the house.

Take a $500,000 home with $360,000 left on the mortgage. At 80%, total borrowing tops out at $400,000, which leaves $40,000. Rocket's smallest home equity loan is $45,000 in most states ($10,000 in Michigan, $61,000 in Iowa), so at a 680 score this homeowner can't get one there in most of the country. At 700 the room grows to $65,000, and at 740 it reaches $90,000. The house and the mortgage balance are the same in all three cases. Only the score moved. The borrowing-limit guide walks through the CLTV math for other lenders.

Where the published floors sit

Spring EQ advertises "Qualify With As Low As a 640 FICO" and loans of up to 90% of the home's value, from $50,000 to $500,000, over 10 to 30 years. It doesn't say whether the 90% ceiling is open to a 640 borrower. Every program is "subject to credit, property, and underwriting approval." It does not take applications for homes in New York.

U.S. Bank puts it plainly: "To qualify for a home equity loan, you'll need a FICO score of 660 or higher." Its own FAQ on bad credit goes further and says you'll need a score "in the good to excellent range and sufficient equity in your home." The bank also caps the loan-to-value ratio at 80% and lends in states where it has branches.

Regions Bank publishes no minimum score. It does publish a price range of 6.75% to 13.75% APR and names credit score and history as one of five factors that place you in it, along with occupancy, lien position, loan-to-value ratio and term.

The advertised rate assumes a higher score

The rate in an ad is almost always the rate for the strongest file. U.S. Bank says the rates shown on its page are for clients paying automatically from a U.S. Bank account "with a FICO score of 730 or higher." FourLeaf Federal Credit Union's 5.99% intro rate on a HELOC requires a VantageScore 4.0 of at least 720, which is a different scoring model from FICO, so the two numbers won't match for the same person.

At Regions, the bottom and top of the range on a $50,000, 10-year loan are $574.12 and $768.83 a month (the second figure is our calculation at 13.75%). The page doesn't say how much of that spread comes from credit and how much from the other four factors.

Income and debt can stop an application that the score would pass

U.S. Bank lists debt-to-income ratio and income history next to the score. Rocket requires full documentation of income and assets. Its page is not consistent about the debt-to-income limit, a problem the borrowing-limit guide looks at in detail.

Sources

Written by Kaz (pen name). Figures are copied from providers' published pages on the dates shown. We have not used these products. Corrections: contact form.