If you plan to apply for a home equity loan and you have bad credit, at the beginning try to clear your existing loans as this may help you increase your credit rating. Also, you can obtain a loan consolidation plan. Analyze your bad credit with your lender. Even with bad credit, you can still apply for a home equity loan. There are many online lenders, specialists for home equity loans, who can help you, and many of them offer free quotes for these kind of loans.