Home Equity · 7 min read
Can You Get a HELOC With Bad Credit in California?
Sometimes. Most HELOC lenders want a credit score of about 680 or higher, and the best terms start around 720. Some lenders will go down to roughly 620–640 if you have plenty of equity and a manageable debt-to-income ratio, usually with a lower maximum line and a higher rate. Below that, a cash-out refinance or a home equity loan is often the more realistic route.
What credit score you need for a HELOC
| Credit score | What to expect |
|---|---|
| 720 and up | The most lenders, the highest combined LTV (often up to 85–90%) and the best pricing |
| 680–719 | Widely available, though some lenders cap the line lower or add to the rate |
| 620–679 | Fewer lenders. Expect a lower maximum LTV, often 70–80%, and a higher margin |
| Under 620 | Very few HELOC options. Look at the alternatives below |
These are typical ranges, not promises. Every lender sets its own guidelines and they change often.
What makes up for a lower score
A lender is weighing how likely it is to be repaid. With a lower score, three things help the most:
- More equity. Borrowing less against the home, for example staying at 70% combined LTV instead of 90%, is the single biggest lever.
- A lower debt-to-income ratio. Most lenders want total monthly debts, including the new HELOC payment, at or under about 43–50% of income.
- A clean recent history. No late mortgage payments in the last 12 months matters more to many lenders than an older collection.
Alternatives if a HELOC is out of reach
FHA cash-out refinance. FHA allows cash-out refinancing up to 80% of the home’s value, and FHA lenders often accept lower credit scores than HELOC lenders do. It replaces your first mortgage, so it only makes sense if the new rate is close to your current one. See cash-out refinancing.
Home equity loan. Some lenders are a little more flexible on a fixed-rate home equity loan than on a revolving line.
Non-QM second mortgage. Non-QM lenders look at the whole file, not just the score. They are often an option for self-employed borrowers or after a recent credit event. Our non-QM programs generally start at a 640 score. See bad-credit mortgage options.
How to improve your odds in 60–90 days
- Pay credit cards below 30% of their limits, and below 10% if you can, before the lender pulls credit.
- Fix errors on your reports at AnnualCreditReport.com.
- Avoid new credit such as car loans or store cards while you apply.
- Ask for a rapid rescore. After you pay down balances, a lender can sometimes have your score updated in days rather than waiting for the next reporting cycle.
How Save Financial helps
Every HELOC lender draws its credit line in a different place. As an independent mortgage broker, we compare 20+ lenders, including programs for lower scores and for self-employed borrowers, and tell you honestly whether a HELOC, a home equity loan or a cash-out refinance gives you the better deal. Call 949-379-5320 (Newport Beach) or 310-759-4757 (Marina del Rey).
Sources: CFPB: What you should know about home equity lines of credit; AnnualCreditReport.com. Guidelines change; confirm current rules with your lender.
About this article: Save Financial is a California-licensed independent mortgage brokerage (NMLS #377740, DRE #01875766) with offices in Newport Beach and Marina del Rey, serving all 58 counties. We shop 20+ wholesale lenders to match you with the right program. This article is general education, not a loan offer or commitment to lend. For a real quote, apply online or call 949-379-5320.