How does your credit score affect your chances of getting a home loan? Lenders in Australia don’t make their credit criteria public, and most lenders also don’t rely on credit score alone to determine your level of credit risk. That said, the higher your credit score, the better your chances of getting loan approval.
It’s tough to definitively state what the cut-off point is for getting home loan approval, as banks and lenders consider their own internal credit assessments along with your score when reviewing your application.
However, credit score providers like Experian do have benchmarks that can be useful in getting an idea of how likely you are to be approved for a home loan. Below is a guide of how your credit score could influence your home loan approval odds with Experian, who run their credit scores between 0 and 1000. The higher the number, the better your credit score is.
A credit score in the bottom two categories isn’t necessarily a death sentence for your dreams of homeownership.
There are lenders who specialise in offering home loans to borrowers with bad credit. They’ll take a more hands-on approach in assessing your credit history, taking into account extenuating circumstances. You’ll end up paying more in interest, but you’ll also have the opportunity to begin rebuilding your credit history.
Credit scoring provides a measure of your risk of future default based on your credit history. Each credit reporting body measures credit scores differently. You can get your free credit score in the Finder app, and it will be delivered from Experian and will be a number between 0 and 1,000.
You can access your Experian Score for free through Finder. You'll get a copy of your score as well as your full credit report. You can also get tips on how to improve your credit score.
Remember, a low score may limit your options, but it doesn't necessarily close the door on your homeownership ambitions. Even with a less-than-perfect credit history, there may still be home loan options available to you.
Get your free credit score now
Your credit score consists of a variety of factors from your credit history, including:
For first home buyers, there’s a range of grants, incentives and programs that could help you into your own home sooner than later.
After 13 interest rate rises from the RBA the rate of inflation is finally slowing. What does this mean for the future of interest rates?
Home loan cashback deals can help you refinance to a cheaper interest rate and get a lump sum cash payment. Compare the latest deals and check your eligibility today.
Work out how much you need to earn to buy a house in any Australian suburb.
Our comprehensive guide to home loan statistics.
In the market for a home or investment? The right buyer's agent could save you thousands. Learn what a buyer's agent does, how much it will cost and more.
You may be able to get a low deposit home loan with just a 5% cash deposit. Here are the lenders who are more likely to lend you a 95% loan.
Compare reverse mortgages and work out if this type of retirement finance is right for you.
Learn how you can set up an SMSF fund, compare SMSF home loans and buy an investment property in your super today.
What is an offset account? It can save you thousands in interest and help you own your home sooner.