Home Loan Variable: 1.89% (1.9%*) • Home Loan Fixed: 2.19% (2.95%*) • Fixed: 2.19% (2.95%*) • Variable: 1.89% (1.9%*) • Investment IO: 2.34% (2.29%*) • Investment PI: 2.14% (2.15%*)

How Does My Credit Score or File Affect My Home Loan?

Your credit score is your credit history converted to a number between 0 and 1000 or 0 and 1200, depending on which credit score provider produced the credit score. The higher the score, the better your credit rating. It is one of the factors used by lenders to determine how likely you are to repay the debt. In the case of phone and utility companies, it can even be a major factor in them determining whether to accept your application.

Your credit score will fluctuate at any point in time as information is added or removed from your credit history, as it is based on factors like:

  • Your repayment history on accounts like credit cards, loans, utilities, phone
  • Any loan or credit applications
  • Any unpaid debts
  • Any defaults
  • Any Judgements
  • Any Bankruptcy
  • Credit limits

Having a good credit rating does help in getting a home loan but it is only one of the factors consider by lenders. Your income, the amount you are borrowing, the amount of the deposit, the value of property and your existing expenses being just some of the other factors which are also important and will be taken into account. Your credit score might also be used to help determine how much you can borrow and at what interest rate.

Since the credit rating isn’t the only factor in approving a home loan, it does mean it may be possible to obtain a home loan even if you have a bad credit rating. There are lenders who will take the time to understand the circumstances surrounding why you have a bad credit rating, what your current circumstances are and how much of a deposit you can place towards purchasing a home. This is covered in a lot more detail in the FAQ Bad Credit Loans

This makes it important for you to occasionally review your credit file and ensure all the information listed is correct, especially before applying for a loan.

The three largest providers of credit scores and history in Australia are

On their websites, you will find information on how to obtain a copy of your credit history as well as information on how to make corrections should you find any errors on your report. We can also help you with obtaining and understanding your credit history report.

What is a good credit score?

Using Equifax as an example, your credit score will be approximately rated as follows

  • Below average (0-505) – There is an above average possibility an adverse event will be recorded on a Credit Report the next 12 months

  • Average (506-665) – There is an average possibility an adverse event will be recorded on a Credit Report in the next 12 months

  • Good (666-755) – Scores in this category indicate that an adverse event is less likely than average to be recorded on a Credit Report in the next 12 months. The odds of no adverse events occurring on your Credit Report in the next 12 months are better than the average population odds

  • Very Good (756-840) – It is unlikely an adverse event is to be recorded on a Credit Report in the next 12 months. In other words, the odds of no adverse events occurring on your Credit Report in the next 12 months are more than 2 times better than the average population odds

  • Excellent (840-1200) – An adverse event is highly unlikely to be recorded on a Credit Report in the next 12 months. In other words, the odds of no adverse events occurring on your Credit Report in the next 12 months are more than 5 times better than the average population odds.

Obtaining my Credit Score

An application for your credit score is only made when it is requested and when required. No application is made without your explicit written permission. See our FAQ titled “Can I Write an Explanation Letter To The Banks Regarding Credit Defaults?“.

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