A good credit score is a basic requirement for traditional home loans, but can you get home improvement loans with bad credit? Home improvement loans meant specifically for remodeling, renovating or repairing your home have similar financial requirements, but can offer a bit more flexibility. Here are the important things to know:
What credit score is needed for a traditional home improvement loan?
Lenders generally require a minimum credit score of 660-700 to qualify for a home improvement loan. While some approve lower scores, the trade-off is usually a much higher interest rate on the loan.
Can I get a renovation loan with bad credit?
The Federal Housing Administration (FHA) offers loans for borrowers with lower credit scores. If you need financing with lower credit, both the FHA 203(k) renovation loan and FHA Title I loan programs are worth investigating.
How can I borrow against my house with bad credit?
To borrow against your house, you need to take out a home equity loan or a home equity line of credit (HELOC). These options use your home as collateral, and allow you to borrow money against the total value. Home equity loans are better for large, one-time projects, while a HELOC is more helpful for funding smaller ongoing projects.
How to build up your credit to get a home improvement loan?
The best ways to build and increase your credit score are to:
- Enable automatic bill pay to guarantee on-time payments.
- Avoid "hard checks" on requests for new credit cards or loans.
- Improve your debt to income ratio.
Unfortunately, improving your credit score won't happen overnight. If you're in need of a time-sensitive renovation, consider these options for obtaining financing - regardless of your credit history.
About the Author
John Hassler
Our goal is overcoming the housing challenge and getting to know one another, here is a bit about me. Providing you with professional guidance for buying and selling homes stems from an in-depth knowledge of the Twin Cities Best Homes and Neighborhoods. For us, the process is a simple one and starts with a conversation about your needs, desires and concerns. No contracts or promises up front. I ask only for the opportunity to understand your housing needs and have you become comfortable with my real estate knowledge and experience. I have lived throughout the metro area, have sold close to 1000 homes as well as built, remodeled and designed homes. My passion is assisting you in discovering that perfect home, location and setting that will bring you and your family pleasure and comfort for years to come. I would enjoy the opportunity to meet with you at your home, business or over a cup of coffee. I am readily available by email, text and enjoy a phone call as well. Please don’t hesitate to contact me, as I always enjoy a new opportunity to help someone!
