Short answer. Pre-qualifying usually uses a soft pull, which doesn't affect your score. A full application may use a hard pull, which can lower it a little for a while. Because there's no monthly payment, an HEI doesn't build or damage payment history the way a loan does, but it is recorded against your home.
How providers check your credit
- Point says it does a soft pull at pre-qualification and a hard pull once you submit a full application. The hard pull shows on your report as an inquiry and may lower your score temporarily. After funding, Point says it checks your credit periodically with soft pulls that don't affect your score. (Point help center)
- Unlock says it makes a soft inquiry during the application that only you can see and that doesn't affect your score. (Unlock FAQs)
- Hometap, Unison, Splitero, and CHEIFS: the FAQ pages we reviewed don't describe the type of credit check. Ask before you apply: "Will you do a hard pull, and when?"
Each provider also publishes a minimum credit score (500 to 680, where published). See them side by side on HEI Offers: home equity investment with bad credit.
What shows on your credit report
- Inquiries. A hard pull appears as an inquiry. Soft pulls are visible only to you.
- No monthly payment history. You don't make monthly payments on an HEI, so there's no on-time or late payment record from it.
- A lien on your home. Providers typically secure the agreement against your property. Unlock, for example, says it secures its interest by placing a lien on the home (Unlock FAQs). A lien is a public record tied to your home, and the HEI is settled when you sell or refinance.
Keep paying your mortgage, property taxes, and insurance on time: those are reported as usual, and Point says falling behind on them risks putting your HEI agreement into default (Point help center).
When it goes wrong
Some consumers have complained to the CFPB about how HEI companies used or reported their credit information. See the counts by provider and issue on HEI Facts: complaints and lawsuits. If something on your report looks wrong, you can dispute it with the credit bureau and file a complaint with the CFPB.
Frequently asked questions
Does applying for a home equity investment hurt my credit score?
It can, a little and temporarily, if the provider does a hard pull when you submit a full application. Point says it does; Unlock says its application uses a soft inquiry that doesn't affect your score. Pre-qualifying usually uses a soft pull.
Is a home equity investment reported as debt on my credit report?
An HEI has no monthly payment, so there's no payment history from it. Providers typically secure it against your home with a lien. Ask the provider exactly what, if anything, it reports to the credit bureaus.
Can an HEI help my credit?
Only indirectly. Point notes that using the funds to pay down debt and staying current on payments could help your overall credit. The HEI itself doesn't build payment history.
Next: see what an HEI would actually cost you on the HEI Calculator, or read Are home equity investments taxable?