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Can I get a HELOC with a 580 credit score?

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Getting approved for a HELOC with a 580 credit score can be tough — but you still have options to consider.

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After years of rapidly increasing home prices, today’s homeowners are sitting on unprecedented levels of home equity. Right now, the average homeowner has approximately $330,000 in available equity — up by about $28,000 compared to February 2024. The amount of home equity that can be accessed while maintaining a healthy 20% equity cushion now amounts to $214,000. This hefty amount of equity represents an appealing opportunity for homeowners to access the funds they need with a home equity loan or a home equity line of credit (HELOC).

Accessing your home equity can come with big benefits, too, especially right now. One is that the low average rates on HELOCs and home equity loans make them a lower-cost alternative to credit cards or personal loans. The borrowing limits tend to be higher than what you’d get with a personal loan or credit card, too. As a result, this type of borrowing can be used for a wide range of purposes, whether you need to cover significant expenses from home improvements, medical bills or education costs. 

However, having equity doesn’t automatically guarantee access to these funds. Home equity lenders carefully evaluate borrowers’ creditworthiness, and factors like a high debt-to-income (DTI) ratio or credit issues can make approval challenging. This raises an important question for homeowners with lower credit scores: Is it possible to get a HELOC with a credit score of 580?

See what HELOC interest rate is available to you here.

Can I get a HELOC with a 580 credit score?

Getting approved for a HELOC with a 580 credit score is generally difficult. Most traditional lenders require a minimum credit score of 620 to 660 to qualify, with some requiring scores of 680 or higher. A 580 credit score is considered “poor” by most lending standards, which makes approval from conventional banks and credit unions unlikely.

That said, it may not be impossible to get approved for a HELOC with this type of credit score. While a 580 credit score is lower than what’s typically required, there are lenders open to borrowers with credit challenges and some non-traditional lenders specialize in working with borrowers who have lower credit scores. To be approved, though, you’ll likely need significant equity in your home, often 40% or more, along with a low DTI ratio and stable income history. They’ll also typically want to see that you’ve maintained a clean payment history on your existing mortgage, as that can lower the risk of approving you to borrow money.

Another factor these lenders examine is your home’s loan-to-value (LTV) ratio, or how much you owe compared to its current value. If your LTV is high — meaning you’ve borrowed a large percentage of your home’s value — getting approved could be harder. Most lenders prefer LTV ratios at or below 80%, though some may go higher depending on other qualifying factors. With a higher amount of equity, lenders may view your application more favorably, despite your low credit score.

If you are approved for a HELOC with a 580 credit score, there is a tradeoff to consider: your interest rate. If your score is below average, you can expect to be offered a higher interest rate than what you’d get with a better credit score. This higher rate accounts for the lender’s increased risk when lending to someone with poor credit. This increased interest rate could impact your monthly payment and your ability to repay the line of credit.

Find out how affordable home equity borrowing could be now.

What other home equity borrowing options do I have?

If a HELOC isn’t feasible due to your credit score or other factors, you may want to consider these other home equity borrowing options:

  • Home equity loan: Unlike a HELOC, which is a line of credit, a home equity loan provides a lump sum and fixed interest rate, allowing for consistent monthly payments. Some lenders may have more flexibility in approving home equity loans compared to HELOCs. With a credit score of 580, you may still face challenges, but it could be worth exploring lenders who work with lower credit scores.
  • Cash-out refinance: A cash-out refinance involves replacing your current mortgage with a new one that is larger than your current loan balance. The difference is paid to you in cash, which you can use however you’d like. Cash-out refinancing might be a better option if your credit score disqualifies you from a HELOC since lenders tend to prioritize the primary mortgage. However, your credit score will still impact your interest rate and loan terms.

The bottom line

Though a HELOC can be difficult to secure with a 580 credit score, it could still be possible. However, you’ll likely pay a lot more in interest if you’re approved. So, if you don’t need the funds immediately, it could benefit you to take steps to improve your credit score first, which can increase your options over time. By improving your creditworthiness, you’ll be better positioned to access the funds you need for home improvement projects, debt consolidation or any other financial needs.



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Democrats and Republicans in tight races seize on comments stemming from “garbage” joke at Trump rally

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In the home stretch of the 2024 election, after a racist comment at a Trump rally comparing Puerto Rico to garbage, both parties are trying to fan political flames to burn the opposition on congressional races, in addition to the presidential contest.

In the hours after comedian Tony Hinchcliffe told a racist joke about Puerto Ricans at a rally for former President Donald Trump at Madison Square Garden on Sunday, Democrats circulated a list of competitive U.S. House races in which people of Puerto Rican descent make up large percentages of the electorate.

Meanwhile, on Wednesday, Republican operatives have tried to seize on a gaffe by President Biden, in which he used the term “garbage” to describe the Trump supporter who made the racist joke. But Republicans have accused Mr. Biden of instead referring to all Trump supporters as “garbage” and are trying to tie Democratic congressional candidates to their accusation regarding the president’s words.

The dual controversies are being amplified and shifting the closing messages in the final few days before Election Day, amid highly competitive contests for control of the Senate and House.

According to a memo obtained by CBS News from Democratic campaign operatives, more than 10% of registered voters in Pennsylvania’s competitive 7th District House race are people of Puerto Rican descent. The memo also said at least 4% of registered voters have ties to Puerto Rico in a three competitive House races in New York, two more in Pennsylvania and at least one each in Florida and Connecticut. 

Leaning into the Madison Square Garden rally controversy, Rep. Susie Lee, a Pennsylvania Democrat defending the battleground 7th Congressional District in and around Allentown, has already raised the issue.   Speaking to the Philadelphia Inquirer, “I am hearing more on this than I’ve heard on almost any other issue this entire campaign season.”

On Long Island, in New York’s competitive 4th District House race, Democratic candidate Laura Gillen amplified the firestorm over the racist joke Tuesday. Rep. Nydia Valazquez, a New York Democrat who was born in Puerto Rico, who was speaking at a Gillen campaign event for small businesses, referenced the controversy and joke.

Fighting to hold a competitive seat in Western Connecticut, Democratic Rep. Jahanna Hayes posted on social media, “Every person, not just the Puerto Rican community, should be saddened and upset by the behavior of the Trump rally at MSG.”

Republicans meanwhile are seeking to magnify President Biden’s potential gaffe from Tuesday.

“The President of the United States just smeared half of the country – House Democrats can speak up now to disagree, or their silence will say everything voters need to know,” GOP North Carolina Rep. Richard Hudson, who chairs the National Republican Congressional Committee, said in a statement.

Rep. Marc Molinaro, a first-term Republican who’s trying to defend his New York 19th Congressional District seat, posted on social media about Biden’s statement. Molinaro wrote in part, “Biden says if you don’t support Kamala Harris, you are garbage.”



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The Climate Election: Natural disaster recovery, explained

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The Climate Election: Natural disaster recovery, explained – CBS News


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Hurricane Helene is one of the deadliest hurricanes to make landfall in the mainland U.S. For many places across Florida, Tennessee and the Carolinas, recovery could take months or even years — and the next president will play a vital role in what that process looks like when they take office in three months. Here’s what to know about Project 2025, former President Donald Trump’s and Vice President Kamala Harris’ stances on extreme weather, disaster recovery, and the root of the increasing frequency and power of storms — climate change.

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Behind efforts to appeal to 2024 women voters

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Behind efforts to appeal to 2024 women voters – CBS News


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Vice President Kamala Harris’ campaign is positioning surrogates like former first lady Michelle Obama to appeal to women voters before Election Day with reminders about vote secrecy and difficult partner dynamics. Dr. Jessica Borelli, a psychological science professor at the University of California, lrvine, joins CBS News with more on the efforts.

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