Key takeaways:
There's no universal minimum credit score. Lender criteria vary.
Credit scores vary between the two main credit reporting bodies Equifax and Experian. Each uses its own scoring system.
A lower score may limit your home loan options, but lenders assess more than your credit score alone.
Your credit history changes over time. Repayments, applications and other credit activity can affect your file.
Check your credit report before applying. This can help you identify potential issues early.
There isn’t one credit score that every lender requires for a home loan or refinance in Australia. Lenders have different credit policies and consider your credit history alongside your broader financial position when assessing an application.
Credit scores can vary between credit reporting bodies because they may hold different information and use different scoring methods, which form part of your credit history. Lenders may also consider factors such as your income, expenses, existing debts and ability to repay the loan.
A lower credit score may make it harder to qualify with some lenders or limit your home loan options, but it doesn't automatically rule out getting a home loan.
Whether you're buying or refinancing, this guide covers:
What credit score you may need for a home loan in Australia.
How credit scores work and what can affect yours.
How a lower credit score may affect your home loan options.
How to review and potentially improve your credit position before applying.
What is a credit score?
A credit score is a number calculated from information in your credit report. It provides a snapshot of your credit history and is one factor a lender may consider when assessing a credit application.
Your credit report records how you've used and managed credit, including your credit accounts, applications and repayment history.
Australians can obtain consumer credit reports and scores from credit reporting bodies such as Equifax and Experian:
Your score can differ between Equifax and Experian because each may hold different information about your credit history and use its own scoring method.
If your scores don't match, it doesn't necessarily mean there's an error. Consider each score against the reporting body's scale and the credit information it holds about you.
You might also be interested in: Understanding your credit score
How is your credit score calculated?
Your credit score is calculated from information in your credit report. Each credit reporting body uses its own scoring method, so the factors considered and their impact on your score can vary.
Key information that may affect your credit score includes:
1. Your credit history
Your credit history shows how you've managed credit over time. Depending on the credit reporting body, this may include:
Repayment history: Whether you've made required repayments on time.
Defaults: Overdue debts recorded as defaults on your credit report.
Court judgments and bankruptcy: Certain credit-related court judgments, bankruptcies and other relevant insolvency information may appear on your credit report.
Types of credit: The credit accounts you've held.
Both positive and negative information can affect your score, although the impact can vary between credit reporting bodies.
2. Credit applications and enquiries
When you apply for credit, an enquiry may be recorded on your credit report. The number, frequency and types of applications you make (including for credit cards and personal loans) may influence your score. Multiple applications over a short period may also be taken into account.
Romeo Raad, Senior Aussie Mobile Broker says the type and timing of credit issues can also be important.
“Missed repayments and defaults can be a concern, but lenders may look at factors such as how recent they are, the type of credit involved and how repayments have been managed since,” he says.
“Multiple recent credit enquiries may also affect your credit profile, so it’s worth being considered about making several applications in a short period.”
Buy Now, Pay Later (BNPL) arrangements may appear on your credit report. Applications can trigger a credit check, and late or missed payments may also be reported. Using BNPL doesn't automatically lower your credit score, but related credit enquiries and repayment information may form part of your credit history.
3. Your broader credit profile
Other information in your credit report, including the length of your credit history, may also affect your score. For example, if you have a limited credit history, there may be less information available to assess. This isn't necessarily positive or negative; it simply means your file may have less credit information.
Because credit reporting bodies use different scoring methods and may hold different information about you, your credit score can vary between them.
What credit score do you need for a home loan in Australia?
There's no universal minimum credit score for a home loan in Australia. As a general guide, a score below around 500 may make getting a home loan more challenging, but how your score is assessed depends on the lender, credit reporting body and your broader application.
Lenders don't assess your credit score alone. They may also consider your income, expenses, debts and financial commitments, repayment history, deposit or available equity, and ability to repay the loan.
“A credit score is important, but there isn’t one number that determines the outcome of a home loan application,” says Romeo.
“Lenders look at a range of factors, so speaking with a broker before you apply may help you better understand how your overall position could be assessed and whether there are areas worth addressing first.”
Which credit bureau do home loan lenders use?
Equifax is commonly used in Australian lending, including for home loans.
However, lenders may use different credit reporting bodies and their own credit assessment systems, so the bureau checked can vary by lender.
Credit score ranges in Australia
Equifax and Experian use different scoring scales and rating bands. This means the same numerical credit score can have a different rating depending on the reporting body.
Credit reporting body | Score range | Credit score bands |
|---|---|---|
0–1,200 | Below average: 0–459 Average: 460–660 Good: 661–734 Very good: 735–852 Excellent: 853–1,200 | |
0–1,000 | Low: 0–299 Fair: 300–499 Good: 500–699 Very good: 700–799 Excellent: 800–1,200 |
These ranges can help you understand where your score sits, but they aren't approval thresholds. Lenders assess your credit history alongside their lending criteria and the other information in your application.
You might also be interested in: Ways to improve your credit score
Can you get a home loan or refinance with a low credit score?
Yes, you may still be able to get a home loan or refinance with a low credit score, but your options may be more limited. This will depend on your credit history, financial circumstances and the lender's eligibility and assessment criteria.
Some specialist or non-conforming lenders consider borrowers who don't meet standard lending criteria, including some with adverse credit histories. These loans may have different interest rates, fees and lending requirements, so compare the overall cost and conditions, not just whether you qualify.
Possible difference | What it could mean |
|---|---|
Fewer lender options | Stricter credit policies may reduce the lenders available to you. |
Higher interest rate | Some lenders may apply risk-based pricing based on their assessment of your circumstances. |
Higher fees | Some specialist or non-conforming loans may have higher or additional upfront and ongoing fees. |
Larger deposit or more equity | A lower maximum loan-to-value ratio (LVR) may mean needing a larger deposit to buy or more equity to refinance. |
A low credit score doesn't determine the outcome on its own. Lenders may also assess your broader credit history, income, expenses, debts and ability to repay.
How Aussie can help: An Aussie Broker can review your circumstances and compare available home loan or refinance options from participating lenders, subject to lender eligibility, assessment and approval criteria.
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How can your credit history affect buying and refinancing?
Your credit history keeps changing after you take out a home loan. How you manage your credit now can shape what lenders assess if you apply to buy another property or refinance later.
When buying your first or next home
A lender may review your credit report as part of its broader home loan assessment. Your report reflects your credit history at the time, so the information available when you first buy may differ from what's available when you apply for another home loan later.
You might also be interested in: Thinking about your next home?
While you have a home loan
Under Comprehensive Credit Reporting (CCR), repayment history information can be recorded on your credit report, including whether you've made required repayments on eligible credit accounts on time.
As you use credit, your repayment history, new credit applications and other reportable activity can be added to your credit file and may become relevant to future lending assessments.
When refinancing
Refinancing generally involves applying for a new home loan, so the lender will assess your circumstances then. This may include your current credit report and credit history alongside your income, expenses, debts and other application information.
Your credit position can change significantly over the life of a home loan. Checking your credit report periodically can help you understand what lenders may see before you next apply.
How can you improve your credit score before applying for a home loan?
If you're preparing to buy or refinance, there are steps you can take to strengthen your credit position. However, there's no single action that guarantees your credit score will increase or reach a particular level.
1. Check your credit report
Review your credit report to understand what's recorded, including your credit accounts, repayment history, enquiries and any defaults.
If you believe information is incorrect, contact the relevant credit reporting body or credit provider to request a correction. Checking early gives you time to address potential errors before applying.
2. Make repayments on time
Keep required loan, credit card and other credit repayments up to date and pay them by their due dates. Repayment history can form part of your credit report, so consistently paying on time can contribute to your credit profile.
You might also be interested in: How do mortgage repayments work?
3. Review debts and credit limits
Review your existing debts and unused credit facilities. Paying down debt where possible may strengthen your overall borrowing position, while reducing or closing credit limits you no longer need may reduce the potential debt a lender considers.
Changing a credit limit doesn't automatically improve your credit score, so consider your broader financial circumstances first.
Romeo says borrowers should be careful about assuming that closing a credit card will automatically improve their credit score.
“Keeping repayments up to date can be just as important as thinking about the number of credit facilities you hold,” he says.
“If you’re planning to buy or refinance, reviewing your credit report early can give you time to understand what’s on your file and discuss with your broker whether there are steps you may want to take before applying.”
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4. Think carefully before making new credit applications
Multiple credit applications over a short period can add enquiries to your report and may affect your credit score or how lenders assess your application.
5. Get help early if you're struggling with repayments
If you're having difficulty making repayments, contact your lender or credit provider early to discuss available hardship assistance. You can also speak with a financial counsellor for free, independent and confidential support with debts, budgeting and creditors.
Before applying for a home loan or refinance, use this checklist:
Check your credit report and understand what's recorded.
Request corrections for information you believe is inaccurate.
Make required repayments on time.
Avoid unnecessary credit applications.
Review existing debts and unused credit facilities.
Contact your lender early if you're struggling with repayments.
How Aussie can help: An Aussie Broker can help you understand how your current borrowing position may be assessed and compare available options from participating lenders, subject to lender criteria and approval.
How does your credit file change over time?
Your credit file changes as new information is reported or existing information is updated.
As your credit report changes, your credit score may also change, although there's no universal schedule for when updates occur. Changes can include:
Credit enquiries: Credit applications may add enquiries to your report.
Repayment history: Whether you make required repayments on eligible credit accounts on time can be recorded.
Accounts and credit limits: Opening or closing eligible accounts and changes to credit limits may be recorded.
Defaults and other events: Defaults, bankruptcies and certain court judgments can be recorded where applicable.
Corrections: Information may be updated if an error is investigated and corrected.
How does Comprehensive Credit Reporting affect your credit file?
Comprehensive Credit Reporting (CCR) allows credit reports to include more information about how eligible credit accounts are managed, rather than only negative events such as defaults.
This can include repayment history information, showing whether required repayments were made on time. Together with other information on your credit report, this gives lenders a broader view of how you've managed credit over time.
Different types of credit information remain on your report for different periods. Your credit file therefore changes over time as information is added, updated, corrected or removed in line with credit-reporting rules.
Before buying or refinancing, check that your personal details, credit accounts, repayment history, enquiries and any defaults or other reportable information are accurate.
Understand your credit position before applying
No single credit score determines whether a lender will approve your home loan or refinance application. Your credit history is one part of a lender's broader assessment, alongside factors such as your income, expenses, debts and ability to repay.
Checking your credit report before applying can help you understand what lenders may see and identify potential issues early. If any information appears incorrect, you can request a correction before applying.
An Aussie Broker can discuss your circumstances and help you compare available home loan or refinance options from participating lenders, subject to lender eligibility, assessment and approval criteria.