Get a credit check before applying for a home loan | finder.com.au

Home loans: Credit check

Your credit history affects your home loan application. But there are options available if you have a bad credit history.

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Lenders need to see proof that you have a good credit history so they know you can pay back the money you borrow from them. Your credit history could be the difference between getting a home loan and getting rejected. You can order your credit report for free today by clicking the link below, or read on to learn how you can improve your credit score or find alternative finance options as a bad credit borrowers.

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How does your credit affect your ability to access home loans?

When you apply for a home loan, banks and lenders check your credit file before you can get approved. Your credit file acts as a representation of your credit history and can include: unpaid bills, getting declined from a loan, late payments, if you have applied too often or if you have declared bankruptcy.

The lender will check your credit file and if you do have any negative marks, your options will be limited. All your past dealings with borrowed money are collected and is used as an indication of your future ability to make repayments.

Improving your chances of being approved for a home loan

There are a few different ways that can help you improve your credit file and chances of being approved for a home loan:

  • Regularly check your credit file. Doing this will ensure that banks or lenders don’t incorrectly place negative listings on your file. It’s also an important step in safeguarding yourself against identity theft. Checking your credit file will ensure there’s no errors and if there is something wrong, fixing the errors will improve your chances of being approved for credit.
  • Pay bills on time. Ensuring you pay your bills on time is one of the most simple ways to improve your credit rating and keep your file clean. You will also look like a responsible borrower to potential lenders.
  • Consider debt consolidation. Debt consolidation is when you consolidate all your debts into one. It will make your repayments easier, as you will only have the one to worry about, and you can significantly reduce your interest. Getting in control of your debt can assist you in improving your credit history.
  • Refinance. You may also want to consider refinancing. Making the switch may help you better manage your debt or find a more suitable home loan for you. You shouldn’t rely on refinancing as a way to get you out of trouble, however, it could potentially improve your chances of success when applying for a home loan.
  • Don’t apply for too many loans. Applying for loans too often and being unsuccessful can hurt your credit rating. Making too many enquiries will raise red flags to lenders as it may indicate that you are irresponsible.

Read our full guide to credit scores and mortgage applications

What are your home loan options if you have bad credit?

Fortunately, even if you do have a bad credit history, there are still some options available to assist you in successfully getting a home loan.

  • Non-conforming lenders. A non-conforming lender will go outside a regular lender’s financial guidelines. This means, they may have different requirements compared to normal lender’s home loans. While these loans are an option for people with bad credit, they come with a few key differences. Loans from non-conforming lenders tend to be risky for the lender, this is why they often charge higher fees and rates to cover themselves.
  • Wait for negative marks to be removed from credit file. Another option you have is to wait for negative marks to be removed. Your credit history doesn’t stay on file forever. In most cases, your credit file usually goes back to how it was within five years. If you are able to wait for negative marks to be removed, this can significantly help you when applying for home loans.
  • Credit repair. Credit repair is the process of an agency refuting any incorrect listings on your file. If successful, you can have these errors removed from your credit history which, in turn, leads to a clean credit file. Keep in mind that this is an expensive process and there is no guarantee that listings can be removed, so be wary of any credit repair agency that claims they will be able to do this.

Looking for a mortgage now? Compare your options

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Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
Westpac Flexi First Option Home Loan - Basic Variable Rate (Owner Occupier, P&I)
2.29%
2.72%
$0
$8 monthly ($96 p.a.)
95%
Up to $3,000 refinance cashback.
A flexible and competitive variable rate loan. Eligible borrowers refinancing $250,000 or more can get $2,000 cashback per property plus a bonus $1,000 for their first application. Other conditions apply.
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
2.54%
2.56%
$0
$0 p.a.
80%
Up to $4,000 refinance cashback With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up to $4,000 cashback and borrow up to 80% of the property's value (terms, conditions & exclusions apply).
Athena Celebrate Home Loan - 60% LVR  Owner Occupier, P&I
2.19%
2.19%
$0
$0 p.a.
60%
Owner occupiers with 40% deposits or equity can get this competitive variable rate loan. No upfront or ongoing fees.
Suncorp Home Package Plus Fixed - 2 Year Fixed Rate Special Offer $150k+ LVR ≤80% (Owner Occupier, P&I)
1.89%
2.94%
$0
$0 p.a.
80%
A low fixed rate loan available for borrowers with 20% deposits.
St.George Fixed Rate Advantage Package -  2 Year Fixed Rate LVR above 80% (Owner Occupier, P&I)
2.09%
3.46%
$0
$395 p.a.
95%
Lock in a low fixed rate for the first two years. Refinancers borrowing $250,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR ≤ 80% (Owner Occupier, P&I)
2.54%
2.55%
$0
$0 p.a.
80%
Get a competitive variable interest rate with no application fee or ongoing fees.
UBank UHomeLoan - 3 Year Fixed Rate (Owner Occupier, P&I)
1.75%
2.22%
$395
$0 p.a.
80%
A competitive fixed interest rate loan with no ongoing fees. Requires a 20% deposit.
Westpac Fixed Option Home Loan Premier Advantage Package - 2 Year (Owner Occupier, P&I)
2.09%
3.50%
$0
$395 p.a.
95%
Up to $3,000 refinance cashback.
Competitive fixed rate home loan. Eligible borrowers refinancing $250,000 or more can get up to $3,000 cashback. Other conditions apply.
homeloans.com.au Low Rate Home Loan with Offset - LVR Under 60% (Owner Occupier, P&I)
2.14%
2.16%
$0
$0 p.a.
60%
A competitive rate with no application or ongoing fee. This loan is not available for construction.
Virgin Money Reward Me Fixed Rate Home Loan - 2 Year $300k+ Special offer (Owner Occupier, P&I)
2.04%
2.79%
$300
$10 monthly ($120 p.a.)
80%
$3,000 refinance cashback.
Buy your home and lock in a low rate for the first two years. Get a $3,000 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 29 November 2020 and settle by 28 February 2021.
IMB Budget Home Loan - LVR ≤80% (Owner Occupier, P&I, NSW and ACT borrowers only)
2.61%
2.67%
$449
$0 p.a.
80%
A competitive variable rate for borrowers with 20% deposits saved. Available for NSW and ACT borrowers only.
Macquarie Bank Basic Home Loan - LVR ≤ 60% (Owner Occupier, P&I)
2.49%
2.49%
$0
$0 p.a.
60%
A competitive variable rate home loan for owner-occupiers. Requires a 40% deposit.
Newcastle Permanent Building Society Real Deal Home Loan - Special Offer 1 (Owner Occupier, P&I)
2.59%
2.63%
$595
$0 p.a.
80%
$2,000 refinance cashback
$2,000 cashback for eligible refinancers borrowing $250,000 or more.
homeloans.com.au Low Rate Home Loan with Offset - LVR 60% to 80% (Owner Occupier, P&I)
2.24%
2.26%
$0
$0 p.a.
90%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments. This loan is not available for construction.
St.George Basic Home Loan - LVR above 80% (Owner Occupier, P&I)
2.59%
2.61%
$0
$0 p.a.
90%
Up to $4,000 refinance cashback.
With this competitive variable rate loan from St.George, refinancers borrowing $250,000+ can get up $4,000 cashback and borrow up to 90% of the property's value. (Terms, conditions & exclusions apply).
IMB Budget Home Loan - Special LVR  ≤95% (Owner Occupier, P&I, NSW and ACT borrowers only)
2.78%
2.84%
$449
$0 p.a.
95%
NSW and ACT customers only. You can get an interest rate discount for a limited time with this competitive variable mortgage.
Bank of Melbourne Basic Home Loan - Special Offer (Owner Occupiers, P&I) LVR above 60% up to 80%
2.54%
2.56%
$0
$0 p.a.
80%
Up to $4,000 refinance cashback
A competitive variable rate loan from Bank of Melbourne. Refinancers borrowing $250,000 or more can get $4,000 cashback (Other terms, conditions and exclusions apply).
UBank UHomeLoan - 1 Year Fixed Rate (Owner Occupier, P&I)
1.99%
2.33%
$395
$0 p.a.
80%
Fix your mortgage for 1 year with a very competitive rate and no ongoing fees.
Bank of Melbourne Advantage Package Fixed Home Loan - 2 Year Fixed (Owner Occupier, P&I) LVR above 80% New customers
2.09%
3.46%
$0
$395 p.a.
95%
Competitive fixed rate loan. Refinancers borrowing $250,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
BankSA Basic Home Loan - Owner Occupier, P&I
2.54%
2.56%
$0
$0 p.a.
80%
Up to $4,000 refinance cashback
A competitive variable rate loan from BankSA. Refinancers borrowing $200,000 or more can get a $4,000 cashback (Other terms, conditions and exclusions apply).
homeloans.com.au Low Rate Home Loan with Offset - LVR 80% to 90% (Owner Occupier, P&I)
2.59%
2.61%
$0
$0 p.a.
90%
Save on interest with a free 100% offset account and buy your property with just a 10% deposit. This loan is not available for construction.
Bank of Melbourne Basic Home Loan - Special Offer (Owner Occupiers, P&I) LVR above 80% New customers
2.59%
2.61%
$0
$0 p.a.
90%
Competitive variable rate home loan. Refinancers borrowing $250,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
IMB Fixed Rate Home Loan - 3 Year Fixed (LVR 95% Owner Occupier, P&I, NSW and ACT borrowers only)
1.97%
2.81%
$449
$6 monthly ($72 p.a.)
95%
NSW and ACT customers only. 3 years fixed interest terms and free access to redraw facility online. Available with a 10% deposit.
Newcastle Permanent Building Society Fixed Rate Home Loan - 2 Year Fixed (Owner Occupier, P&I)
2.58%
3.99%
$595
$0 p.a.
95%
$2,000 refinance cashback
Borrow up to 95% LVR of the value of the property you're buying and pay no ongoing fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
BankSA Advantage Package Fixed Home Loan - 2 Year Fixed (Owner Occupier, P&I)
2.09%
3.46%
$0
$395 p.a.
95%
Competitive fixed rate loan. Refinancers borrowing $200,000 or more can get cashbacks between $2,000 and $4,000 depending on their loan to value ratio (Other terms, conditions and exclusions apply
Athena Liberate Home Loan - 70% to 80% LVR Owner Occupier, P&I
2.29%
2.23%
$0
$0 p.a.
80%
A competitive variable rate mortgage for owner occupiers $0 application and $0 ongoing fees. This interest rate falls over time as you pay off the loan.
Virgin Money Reward Me Variable Home Loan - LVR ≤ 60% (<$500k Owner Occupier, P&I)
2.59%
2.76%
$300
$10 monthly ($120 p.a.)
60%
$3,000 refinance cashback.
A variable rate loan for owner occupiers with a 40% deposit (or equity) borrowing under $500,000. Get a $3,000 cashback when you switch to Virgin Money with a loan amount of $300,000 or more with an LVR up to 80%. You must apply by 29 November 2020 and settle by 28 February 2021.
Athena Evaporate Home Loan - 60% to 70% LVR  Owner Occupier, P&I
2.24%
2.21%
$0
$0 p.a.
70%
A low variable rate for owner occupiers with 30% deposits. No upfront or ongoing fees.
HSBC Home Value Loan - Promotional Offer LVR 90% (Owner Occupier, P&I)
2.64%
2.65%
$0
$0 p.a.
90%
A competitive value home loan with no ongoing fee.
UBank UHomeLoan Variable Rate - Discount Offer for Investor Variable P&I Rate
2.74%
2.74%
$0
$0 p.a.
80%
Get a discounted, low-fee investor loan from a convenient online lender. 20% deposit required.
Newcastle Permanent Building Society  Premium Plus Package Fixed Rate - 2 Year Fixed (Owner Occupier, P&I)
2.48%
3.77%
$0
$395 p.a.
95%
$2,000 refinance cashback
Enjoy a discounted fixed rate and the ability to package the loan with other financial products. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
IMB Fixed Rate Home Loan - 2 Year Fixed (LVR 95% Owner Occupier, P&I, NSW and ACT borrowers only)
2.09%
2.90%
$449
$6 monthly ($72 p.a.)
95%
NSW and ACT customers only. 2 years fixed interest terms and free access to redraw facility online. Available with a 5% deposit.
UBank UHomeLoan - 3 Year Fixed Rate (Owner Occupier, IO)
2.09%
2.30%
$395
$0 p.a.
80%
A competitive 3 year fixed rate with no ongoing bank fees.
Athena Variable Home Loan - Owner Occupier, IO
2.84%
2.46%
$0
$0 p.a.
80%
Owner occupiers can refinance to one of the most competitive interest-only rates in the market. No application fee and no ongoing fees.
UBank UHomeLoan - 1 Year Fixed Rate (Owner Occupier, IO)
2.14%
2.35%
$395
$0 p.a.
80%
A one year fixed rate offer with no ongoing bank fees.
IMB Fixed Rate Home Loan - 3 Years Fixed (LVR ≤90% Investor, P&I, NSW and ACT borrowers only)
2.64%
3.40%
$449
$6 monthly ($72 p.a.)
90%
NSW and ACT customers only. A 3 years fixed rate investor which allows extra repayments to be made.
CUA Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier, P&I)
1.97%
3.86%
$600
$0 p.a.
95%
Pay no ongoing fees and lock in your rate for 3 years to organise your budget. Eligible new home buyers with low deposits can apply for the First Home Loan Deposit Scheme with this lender and avoid LMI costs.Eligible refinancers can get a $2,000 pre-paid credit card when they switch to CUA.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, IO)
2.29%
2.72%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Newcastle Permanent Building Society Premium Plus Package Home Loan - New Customer Offer Discount 1 ($150k+ Owner Occupier, P&I)
2.94%
3.34%
$0
$395 p.a.
95%
$2,000 refinance cashback
New borrowers or refinancers can get a discounted rate with this package loan. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
Macquarie Bank Basic Home Loan - LVR ≤ 80% (Owner Occupier, P&I)
2.64%
2.64%
$0
$0 p.a.
80%
Pay no application and ongoing fees and take advantage of split and redraw options.
Macquarie Bank Basic Fixed Home Loan - 3 Year Fixed Rate LVR ≤ 70% (Owner Occupier, P&I)
2.09%
2.43%
$0
$0 p.a.
70%
Get a low interest rate and a mortgage with flexible, basic features. No application or ongoing fees. Requires a 30% deposit.
Newcastle Permanent Building Society Fixed Rate Home Loan - 1 Year Fixed (Owner Occupier, P&I)
2.38%
4.11%
$595
$0 p.a.
90%
$2,000 refinance cashback
Investors can take advantage of a short term fixed rate with no ongoing fees. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
UBank UHomeLoan - 1 Year Fixed Rate (Investor, P&I)
2.14%
2.71%
$395
$0 p.a.
80%
Investors can enjoy flexible repayments and an easy application process with this pioneering online lender.
Newcastle Permanent Building Society Fixed Rate Home Loan - 3 Year Fixed (Owner Occupier, P&I)
2.58%
3.86%
$595
$0 p.a.
95%
$2,000 refinance cashback
A low 3-year fixed rate with the option to split your loan for free. $2,000 cashback for eligible refinancers borrowing $250,000 or more.
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