Denied for HELOC due to lack of credit history

[Ken J.]

Hi,

I am considering obtaining a HELOC to purchase a second property (ideally for investment purposes). I have applied with Chase and a local credit union and have been rejected for lack of credit history. I own my current 2 family home free and clear as it was bought with cash. Further, my income is sufficient (i.e., above average) and that was never cited as a problem. I had a small amount of student loans (i.e., less than $10K), which I paid off within 3 years after graduating college and purchased a car (less than $28K), which I paid off within 4 years. I don't have any credit card debt as I pay my bill in full every month.

A couple of questions:

1. What should I do as my lack of credit history appears to be a problem with whichever lender I go to?

2. Does it hurt my credit history if I go from lender to lender applying and getting rejected for similar reasons? Is there a certain amount of time that I should wait before I reapply elsewhere for a HELOC or should I try and apply with various loan institutions for a HELOC within a short time period (i.e., 1 month period)

3. If I get rejected, is it worth speaking with the loan officer and seeing if they would be willing to extend me a HELOC for a lower amount than I had initially requested?

4. Reason for HELOC - would "wanting to purchase investment property" an acceptable reason for obtaining a HELOC? If not, please advise as to what would be most appropriate.

In case helpful, I live in the NY metro area. Many thanks in advance for your responses.