Does a HELOC hurt your credit? The 5-point inquiry, the new account and your balance
A HELOC usually lowers your credit score a little when you open it, then can help it over time. The lender’s hard inquiry may cost fewer than five FICO points, and the new account lowers the average age of your accounts. After that, your payment history matters most, and FICO Scores generally leave the HELOC balance out of your credit utilization.
The details differ between FICO and VantageScore, the two scoring brands lenders use, and they matter most if you plan to draw a large balance, pay off credit cards with the line, or close it later. Below is each effect, two worked examples with real numbers, and how to keep the dip small. LenderMatch never pulls your credit, so you can compare HELOC lenders before any of them checks it.
How a HELOC affects your credit at each stage
| Stage | FICO Scores | VantageScore |
|---|---|---|
| You apply | Hard inquiry; myFICO says it may cost fewer than 5 points | Hard inquiry; inquiries within 14 days count as one |
| The line opens | New account lowers the average age of your accounts | New account is part of “recent credit” and credit depth |
| You draw a balance | Generally excluded from utilization; counts under “amounts owed” | Listed with credit cards as revolving debt |
| You make payments | Payment history is 35% of the score | Payment history is 41% of VantageScore 4.0 |
| You close the line | Usually no utilization change, since HELOCs are generally excluded | Losing credit limit can lower a score |
Sources listed at the end.
Does applying for a HELOC affect your credit score?
Yes, slightly. When you apply, the lender will typically run a hard inquiry on your credit reports, and myFICO says a new inquiry may knock fewer than five points off your FICO Score. FICO Scores only count inquiries from the past 12 months, so the effect fades.
If you compare several HELOC lenders, keep any hard pulls close together. VantageScore says credit inquiries within a 14-day period are counted as a single inquiry, and our guide on whether rate shopping hurts your credit explains the 14- and 45-day windows FICO uses for mortgage inquiries. Before you give permission, ask each lender whether its next step is a soft inquiry, which does not affect your score, or a hard one.
Does opening a HELOC lower your average age of accounts?
It does. myFICO says adding a new tradeline to your credit reports will result in the average age of your accounts going down. Length of credit history makes up 15% of a FICO Score, and FICO looks at your oldest account, your newest account and the average of all of them.
Example: you have four accounts that are 20, 12, 8 and 4 years old. Their average age is 11 years. Open a HELOC and you now have five accounts averaging 8.8 years. The drop shrinks each year the line stays open.
The same step can help your credit mix, which is 10% of a FICO Score. myFICO says having different types of credit can help, and that adding a second mortgage could potentially improve the credit mix part of your scores. If you mainly have credit cards and a first mortgage, a HELOC adds variety.
Does a HELOC affect your credit utilization?
Under FICO Scores, usually not. myFICO says FICO Scores treat HELOCs differently than unsecured personal lines of credit, and that “the FICO Score generally excludes HELOCs from credit utilization calculations.” A HELOC balance still counts in the broader “amounts owed” category, which is 30% of the score, but drawing on the line is not treated like maxing out a credit card.
VantageScore groups them more closely. Its consumer FAQ says “credit cards and home equity lines of credit are examples of revolving debt,” that a utilization ratio over 30% is likely to have a negative effect, and that credit scores may be lower when balances are high relative to limits. In VantageScore 4.0, utilization is 20% of the score and balances another 6%.
Lenders choose which score they pull, so a large HELOC balance may matter more to one lender than another.
Worked example: paying off credit cards with a HELOC
Say you have $20,000 in credit card limits with $15,000 in balances. Your card utilization is 75%. You open a $100,000 HELOC, draw $15,000 and pay the cards to zero.
| Measure | Before | After |
|---|---|---|
| Card balances / card limits | 75% | 0% |
| If the HELOC were counted with your cards | 75% | 12.5% |
Calculated by LenderMatch: $15,000 ÷ $20,000 = 75%; $15,000 ÷ ($20,000 + $100,000) = 12.5%. Neither scoring company publishes how many points a given change is worth.
Either way, the utilization number falls a long way, which is why some people see their scores rise after consolidating. Two cautions. The debt is now secured by your home, and the CFPB warns that if you fall behind or can’t repay a HELOC on schedule, “you could lose your home.” And if the cards fill back up, you carry both balances. Using a HELOC to pay off credit cards runs the interest math and the habits that keep the balances from returning.
Can a HELOC help your credit score?
Over time, it can. Payment history is the largest factor in both models: 35% of a FICO Score and 41% of VantageScore 4.0. myFICO says that if you manage your payments on time, “home equity loans and HELOCs can help you increase your FICO® Scores over time.”
The reverse is also true. myFICO warns that missing a payment by 30 days or more “could have a significant negative impact on your credit,” and VantageScore notes that the Fair Credit Reporting Act lets late payments stay on credit files for up to seven years.
Watch the payment change. Many HELOCs allow interest-only payments during the draw period, then switch to principal and interest. On $40,000 at 8.00%, interest alone is about $267 a month; repaid over 20 years, the same balance costs about $335 a month. Plan for the higher number so the switch doesn’t lead to a late payment. The HELOC payment calculator shows both phases, and when the draw period ends covers the switch.
Does closing a HELOC hurt your credit?
Usually less than people expect, at least under FICO. Because FICO Scores generally exclude HELOCs from utilization, closing a paid-off line doesn’t raise your FICO utilization the way closing a credit card can. And the account doesn’t vanish: Experian says accounts closed in good standing can stay on your credit report for up to 10 years from the date they close.
VantageScore says canceling a credit card decreases your overall credit limit, which negatively impacts your score. Because it treats home equity lines as revolving debt, closing a HELOC could work in a similar direction under VantageScore. We found no HELOC-specific guidance from VantageScore on this.
Before you close a line, check your agreement. Some HELOCs charge a fee to close within the first few years; paying off a HELOC early covers those fees and the choice between closing the line and keeping it open at zero.
Your lender can also limit the line. The CFPB says that if your home’s value drops significantly, or your finances change and the lender doesn’t believe you can make your payments, it might decide not to let you take out additional credit under the plan.
Does a HELOC show on your credit report?
Yes. A HELOC is reported as a new account (a tradeline) with its credit limit, balance and payment record. myFICO describes it as a revolving line of credit, similar to a credit card. You can see it on your free credit reports once the lender begins reporting.
How to keep a HELOC from hurting your credit
- Check your credit before you apply. Checking your own credit is a soft inquiry. If your score is near a lender’s minimum, see getting a HELOC with a 620 credit score and HELOC requirements.
- Group your applications. Keep hard inquiries within 14 days of each other.
- Avoid other new credit in the weeks around the application.
- Set up automatic payments for at least the minimum, since payment history carries the most weight.
- Plan for the repayment period, when the payment can rise.
- Keep paid-off cards paid off if you used the line to consolidate.
New to HELOCs? What is a HELOC explains the draw and repayment periods, and the home equity calculator shows how much you may be able to borrow.
Frequently asked questions
How many points does a HELOC drop your credit score?
The application itself usually costs little. myFICO says a new inquiry may knock fewer than five points off your FICO Score. The new account can also lower the average age of your accounts for a while. Neither FICO nor VantageScore publishes a fixed point drop for opening a HELOC, because the effect depends on the rest of your credit file.
Does an unused HELOC affect your credit score?
An open line with no balance still appears on your credit reports as an account, and it ages over time like any other. With no balance there is no payment to miss. Under FICO Scores, HELOCs are generally left out of the credit utilization calculation, so an unused line does not change that ratio.
Does a HELOC count as revolving credit?
Yes. myFICO says a HELOC is still considered a revolving credit account in terms of your credit mix, and VantageScore lists home equity lines of credit alongside credit cards as examples of revolving debt. The difference is utilization: FICO generally excludes HELOCs from that calculation.
Will closing a HELOC hurt my credit?
Usually not by much under FICO, since a HELOC generally isn’t part of your FICO utilization. The closed account can stay on your credit report for up to 10 years if it was in good standing, according to Experian. VantageScore says losing credit limit can lower a score, so the effect may differ by model.
Can a HELOC help your credit score?
It can over time. myFICO says home equity loans and HELOCs can help increase your FICO Scores if you make your payments on time, and that adding a second mortgage could potentially improve your credit mix. A payment 30 or more days late can do significant damage.
Does LenderMatch check my credit?
No. LenderMatch never pulls your credit. A lender you choose may check it, with your permission, when you apply.
Compare HELOC offers without a credit pull from LenderMatch →
Sources
- myFICO, “How Does a Home Equity Loan Affect Your Credit?” (credit education blog, accessed October 22, 2026): hard inquiry under five points, average age, credit mix, payment history.
- myFICO, “Understanding Accounts That May Affect Your Credit Utilization Ratio” (accessed October 22, 2026): FICO generally excludes HELOCs from utilization.
- myFICO, “What’s in my FICO Scores?” (accessed October 22, 2026): 35% payment history, 30% amounts owed, 15% length of history, 10% new credit, 10% credit mix.
- VantageScore, Consumer FAQs (accessed October 22, 2026): HELOCs as revolving debt, 30% utilization, 14-day inquiry window, canceling cards, seven-year late payments.
- VantageScore, “The Guide To Your VantageScore Credit Score” (June 26, 2025): VantageScore 4.0 factor weights.
- Experian, “What Does ‘Closed Account’ Mean on Your Credit Report?” (October 20, 2026).
- CFPB, “What is a home equity line of credit (HELOC)?” (last reviewed August 28, 2026).
Last reviewed October 22, 2026.