Journal About Home Loans, Mortgage Rates and Buying a Home

When you walk into a bank asking to borrow against your house, the loan officer pulls your credit score before discussing anything else. Think of it as your financial report card—and lenders use it to decide whether you're worth the risk. Here's what catches borrowers off guard: you might own $200,000 in home equity outright, but a 590 credit score stops the conversation cold at most institutions. The approval process weighs multiple factors, though your three-digit number determines which lenders will even listen to your application.

What Credit Score Do You Need for a Home Equity Loan?

Walk into Chase or Bank of America, and you'll typically need 680 to start a serious conversation. Drop below that, and you might squeeze through at 660 if your debt-to-income ratio impresses them or you're borrowing a small amount relative to your equity.

Credit unions play by different rules. Navy Federal Credit Union and PenFed have approved members at 620, particularly when those borrowers have checking accounts showing consistent deposits and three years of membership history. Employment stability matters here—teachers, nurses, and government workers with pension track records get more leeway than commission-based salespeople, even at identical credit scores.

The online lending world splits into two camps. Figure and LightStream chase borrowers above 720 with competitive rates. Meanwhile, lenders like Aven and Spring EQ work the 640–680 range, though you'll pay 2–3 percentage points more for...