Last updated: May 2026.
What Credit Score Do You Need for a Home Loan in Australia?
Quick answer: Most Australian banks require a credit score of 600 to 700 (Equifax scale, 0 to 1200). Specialist lenders work with scores as low as 400. Your score is one factor among many; a strong deposit and stable income can offset a lower score.
Your credit score is a critical factor when applying for a home loan in Australia. While there's no single "minimum" threshold that guarantees approval, understanding the ranges and what lenders expect can help you prepare your application, or determine whether a specialist lender is the right fit.
What Credit Score Do You Need for a Home Loan?
The Australian banking system uses three credit reporting agencies, Equifax, illion, and Experian, each with its own scoring scale. Most major banks prioritize Equifax scores.
| Rating | Equifax Score | illion Score | What It Means |
|---|---|---|---|
| Excellent | 853 to 1200 | 800 to 1000 | Best rates, all lenders welcome you |
| Very Good | 735 to 852 | 700 to 799 | Most lenders, competitive rates |
| Good | 661 to 734 | 500 to 699 | Most lenders, standard rates |
| Average | 460 to 660 | 300 to 499 | Limited lenders, higher rates |
| Below Average | 0 to 459 | 0 to 299 | Specialist lenders only |
Big 4 banks (CBA, NAB, Westpac, ANZ) typically want a score of 661+ (Good band). However, with a strong deposit (20%+) and stable income, some will consider scores as low as 600.
Specialist (non-bank) lenders work with scores down to 400 but charge 1 to 3% higher interest rates. You can refinance to a cheaper rate once your score improves.
The Three Australian Credit Bureaus
Equifax (0 to 1200 scale)
The most widely used bureau by major Australian banks. You can check your free Equifax score through GetCreditScore or request a full report every 3 months from Equifax.com.au.
illion (0 to 1000 scale)
Formerly known as Dun & Bradstreet, illion is used by some lenders and credit providers. Request your report from creditreport.com.au.
Experian (proprietary scale)
The third major bureau. All three bureaus may have different scores for you because different creditors report to different bureaus, a default with one lender might appear on Equifax but not illion.
How Lenders Actually Use Your Credit Score
Lenders don't make decisions on credit score alone. They assess:
- Your score, one data point
- Your deposit, a 20% deposit is stronger than 5%
- Your income stability, 3+ years in the same role is ideal
- Your debt-to-income ratio, lower is better
- Recent credit history, the last 2 years matter most
- The reason behind defaults, a 3-year-old missed payment is less concerning than a recent one
A major bank might decline a 750 score if you've missed payments in the last 6 months. A specialist lender might approve a 520 score if your last default was 2+ years ago and you've since paid other debts on time.
Bank vs. Specialist Lender Minimums
| Lender Type | Typical Score Range | Interest Rate Premium | Best For |
|---|---|---|---|
| Big 4 banks (CBA, NAB, etc.) | 661+ | 0% | Clean or very good credit |
| Second-tier banks (Macquarie, etc.) | 600+ | 0% | Good to average credit |
| Specialist non-banks (Pepper, Bluestone, etc.) | 400+ | +1 to 3% | Bad credit, recent defaults |
| Credit unions | 500+ | 0 to 1% | Fair to average credit |
Can You Get a Home Loan with Bad Credit?
Yes. Specialist lenders like Pepper Money, Liberty Financial, Bluestone, and Resimac exist specifically for borrowers with poor credit histories. They assess your full financial story, not just a number.
Common options:
- Non-conforming home loans, higher interest, lower loan-to-value ratio (LVR), but no score threshold
- Larger deposit, 15 to 20% instead of 5% can offset credit concerns
- Debt consolidation, refinance existing debts into your home loan via our refinancing service
- Wait and rebuild, 12 to 24 months of on-time payments can raise your score significantly
A RyRo mortgage broker can match you with specialist lenders suited to your specific credit situation.
How to Check Your Credit Score for Free
- Equifax (instant online). Sign up at Equifax.com.au or GetCreditScore.com.au. Your score appears instantly in your myEquifax account. You can request a full report every 3 months at no cost.
- illion. Request your free report from creditreport.com.au. Delivered online or by post.
- CommBank Credit Insights. If you're a Commonwealth Bank customer, you can check your Equifax score for free via CommBank.com.au.
Note: Self-checks are "soft enquiries", they don't impact your score. However, when a lender checks your score (a "hard enquiry"), it can lower your score by a few points. Multiple hard enquiries in a short period can signal desperation and hurt your application.
How to Improve Your Credit Score Before Applying
If your score is below 661, follow these steps:
- Check your report for errors, dispute any incorrect entries with the bureau (takes 10 to 30 days to resolve)
- Pay all bills on time, at least 6 to 12 months of on-time payments shows lenders you're reliable
- Reduce credit card limits, lower available credit improves your score
- Cancel unused credit cards, fewer open accounts = lower risk perception
- Pay down existing debts, lower credit utilisation (aim for <30% of your limit)
- Avoid new credit applications, don't apply for personal loans, car loans, or credit cards in the 6 months before your home loan application
- Become an authorized user on someone else's credit card (optional), their positive payment history can help if they have excellent credit
Most improvements take 3 to 6 months for small changes, 12 to 24 months for significant ones.
What Hurts Your Credit Score the Most
- Missed payments, 1 missed payment can lower your score by 30 to 50 points
- Defaults, stay on your file for 5 years (paid) or 7 years (unpaid)
- Bankruptcy, visible for 5 to 7 years depending on how it's discharged
- Court judgements, severely damaging; visible for many years
- Multiple credit enquiries, more than 2 to 3 in 3 months raises red flags
- High credit utilisation, maxing out credit cards signals financial stress
- CCJs and director defaults, if you're a business director with defaults, it can affect personal lending
Fortunately, none of these are permanent. Time and consistent good behaviour heal your credit file.
Related guides from RyRo Loan Centre
If you are working on your home loan application, these are worth a read next:
- Home loan pre-approval: what you need to know in 2026, how to use a healthy credit score to lock in pre-approval fast.
- Self-employed home loan Australia: how to get approved, credit score requirements specific to ABN holders and contractors.
- How to get a home loan in Australia, the full step-by-step process from deposit to settlement.
- Borrowing power calculator, see what your current score and income translate to in loan size.
- Contact us for a written credit-positioning plan.
Does checking my own credit score hurt it?
No. Soft enquiries (self-checks via Equifax, GetCreditScore, or your bank) don't impact your score. Hard enquiries from lenders do, but only by 5 to 10 points each.
How long do defaults and missed payments stay on my report?
Paid defaults: 5 years from the date of payment. Unpaid defaults: 7 years from the default date. Bankruptcy: 5 years from discharge (can be up to 7 depending on state).
Will applying for a home loan hurt my credit score?
Each home loan application triggers a hard enquiry, which can lower your score by 5 to 10 points. Multiple applications within a few weeks compound this damage. Work with a broker who can submit to multiple lenders simultaneously to minimize enquiries.
Can I get a home loan with a default on my file?
Yes, especially through specialist lenders. If the default is paid and more than 12 months old, your chances improve significantly. If it's recent or unpaid, specialist lenders will still consider you but charge a premium.
How quickly can I improve my credit score?
Small improvements (10 to 20 points): 3 to 6 months of on-time payments. Significant improvement (50+ points): 12 to 24 months. Removed defaults: 5 to 7 years (they fall off automatically).
Should I use a mortgage broker or apply directly with a bank?
A broker is ideal if your credit is below 661. They know which specialist lenders will approve lower scores and can avoid submitting your details to lenders that will definitely decline you (saving you hard enquiries). Direct bank applications are faster if your score is 700+, but brokers are often better value even for good credit.
Next Steps
Ready to explore your home loan options? Check your borrowing power or book a free strategy call with a RyRo mortgage broker. We specialize in matching borrowers with the right lender, whether that's a big bank or a specialist non-bank lender.
Last updated: April 2026. Australian credit scoring standards and lender requirements evolve over time; this guide reflects current 2026 practices.
Quick answers
Frequently asked questions
Most major banks want at least 622 on the Equifax scale (or 500 on illion) for a standard home loan in 2026. The sweet spot for sharp rates is 720 and above. Specialist non-bank lenders will consider scores from around 450 with higher rates and tighter LVR caps. Below 400, you usually need a strong deposit, a guarantor, or significant equity to get approved at all.
Yes, through specialist or non-conforming lenders. Rates typically sit 1 to 3% above standard home loans, LVR is usually capped at 80% to 85%, and the lender focuses on the story behind the bad credit. Recent paid defaults are easier to explain than unpaid ones. See our specialist lending services for the lender list.
Five years in Australia, even after you pay them. Serious credit infringements (like court judgments and Part IX agreements) stay for 5 to 7 years. Bankruptcy stays for 5 years from discharge, or 7 years from the date of bankruptcy, whichever is longer. Defaults under $150 generally cannot be listed.
No. A soft enquiry (you checking your own score via Equifax, illion, or a free service like GetCreditScore) has no impact. Hard enquiries (lenders running a check when you apply for credit) are recorded and can affect your score if you accumulate several in a short period.
Most major banks use Equifax (the largest bureau in Australia). illion is widely used by mid-tier lenders, and Experian is used by a smaller group. Lenders typically check one bureau, occasionally two for higher-risk applications. The scores between bureaus can differ by 100 points or more, so check your file with each before applying.
Pay every bill on time for 6 to 12 months, reduce credit card limits to the minimum you need, close unused store cards and BNPL accounts, fix any errors on your credit file, and avoid new credit applications in the 3 months before your home loan application. Most borrowers see a 30 to 80 point lift in 6 months from disciplined behaviour.
Sometimes. A family guarantee can offset a low deposit and add security, but most lenders still want the borrower's credit score above their minimum threshold. A guarantor does not erase bad credit. See our guarantor home loan guide for how the structure works.
Yes, but less than unpaid ones. A paid default shows you eventually resolved the debt, which most lenders view more favourably. Specialist lenders accept paid defaults more readily than majors. The default still appears on your file for 5 years from the listing date regardless of payment status.
They use different scales (Equifax 0 to 1200, illion 0 to 1000) and different data weightings. Equifax tends to weight recent activity heavier, illion tends to weight the long-term pattern. A "good" score is roughly 661+ on Equifax and 500+ on illion. Always check both before applying because lenders pull different bureaus.
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