Home equity line of credit is offered against the equity in your home. Your home is used as collateral while offering this line of credit. It is a secured loan used as credit card. You are assigned a line of credit. You can borrow as much as you want and when you want. Once you pay back this amount it is there to be used again. You need to pay the interest only on the amount that you have used.
If you have a bad credit you need to be careful about the terms on which you have been offered this line of credit. Most lenders offer a line of credit at no closing fee. This allows you to save money on the second mortgage. The interest rate can be fixed or adjustable. Different lenders would offer you different loan terms. Variation in rate of interest, in fees, payment schedules and the possibility to refinance in the future are some of the difference which you may come across.
To find out the difference in the offers from different lenders you need to request credit quotes. Most of the lenders have online facility to submit your application. You need to look at the rates, fees, payment structures and the terms. If the basic terms are not listed, you need to request additional information before you commit to an offer.
Bad credit may increase difficulty in obtaining a home equity line of credit. Bad credit is the result of poor credit scores. The homeowners who have a bad credit will be offered a higher interest rate. The credit score is the indicator for a lender to find out if the loan should be approved or not. If yes what should be the credit limit. Credit score is the reflection of how credit is used in the past by an individual. There are three agencies that keep record of this in the U.S.
It is always advised to look into your financial position, payment ability, current debts before you commit for a new loan or line of credit against your home equity. For individual with bad credit , a line of credit  would allow you borrow only what is required  and that too when it is needed. The payment flexibility is also there. The line of credit is always good to meet your short term financial needs which often arise unexpectedly. So once you know that you will get money in your pocket to cover this expense after a few months.
On the other hand a home loan is considered a better choice. It would allow you clear your existing debts which are on higher interest rate and save your money as you pay lower interest rate and tax deduction are also there on the interest paid on the home equity loan.