Century 21 North East, NH & MA and Sunrise Properties (Travis Realty), FL

Home improvement loans with bad credit: A quick guide to your options

by Maureen Roberts 06/04/2023

Person on tablet

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
Author

Maureen Roberts

Team player with track record of successfully bringing Sellers & Buyers together to assure a smooth real estate transaction timely with the #1 full service real estate sales office within Merrimack Valley specializing in e-marketing technologies & customer service! Areas of specific expertise include all of Merrimack Valley & New Hampshire including: Billerica, Andover, Bedford, Burlington, Carlisle, Chelmsford, Dracut, Dunstable, Lawrence, Lowell, Methuen, North Andover, Pepperell, Tewksbury, Tyngsboro, Westford & Wilmington. Over 20 years of progressive sales & marketing experience with both Fortune 500 & privately held start-up companies.