What Credit Score Do You Need for a Home Loan?
Your credit score plays a significant role in whether you get approved for a home loan and what interest rate you are offered. But many Australians do not know their score or understand how it works. Here is everything you need to know about credit scores and home loans in 2026.
What Is a Credit Score
Your credit score is a number between 0 and 1,200 (or 0 to 1,000 depending on the bureau) that represents your creditworthiness. It is calculated by credit reporting agencies based on your credit history, including loans, credit cards, payment history, and enquiries. The three main credit bureaus in Australia are Equifax, Experian, and Illion.
Credit Score Ranges
- Excellent (833 to 1,200): Best rates and highest approval chances. You are a low-risk borrower
- Very good (726 to 832): Strong position for home loan approval with competitive rates
- Good (622 to 725): Most lenders will approve you. Some rate negotiation may be needed
- Average (510 to 621): Approval possible but may face higher rates or stricter conditions
- Below average (0 to 509): Difficult to get approved with major lenders. May need specialist or non-bank lenders
What Score Do You Need for a Home Loan
There is no universal minimum score, but here is what to expect:
- Major banks (CBA, ANZ, Westpac, NAB): Generally want a score above 600 to 650, though policies vary and other factors are considered alongside the score
- Credit unions and smaller lenders: May be more flexible, often approving from 550 to 600 depending on the overall application
- Non-bank lenders: Some specialist lenders will consider scores from 400 to 500 but typically charge higher interest rates
It is important to understand that your credit score is just one factor. Lenders also assess your income, employment stability, savings history, existing debts, and the property itself.
How to Check Your Credit Score
You can check your credit score for free in Australia through:
- Equifax: Free annual report or subscribe for ongoing monitoring
- Experian: Free credit score through their website
- CreditSavvy (by Savvy): Free ongoing credit score monitoring via Experian
Checking your own score does not affect it. This is classified as a soft enquiry and does not appear on your credit report.
What Hurts Your Credit Score
- Missed or late payments: Even one missed payment stays on your record for 2 years and can drop your score significantly
- Multiple credit applications: Each application creates a hard enquiry. Multiple applications in a short period suggests financial stress
- Defaults: Unpaid debts over $150 that are more than 60 days overdue are recorded as defaults and stay for 5 years
- Bankruptcy or Part IX agreements: Severe negative marks that stay on your record for years
- High credit utilisation: Using a large percentage of your credit card limit can lower your score
How to Improve Your Credit Score
- Pay all bills on time: Set up direct debits for minimum payments on everything
- Reduce credit card limits: Lower your limits or cancel cards you do not use. Even unused credit cards affect your score
- Avoid multiple applications: Do not apply for multiple loans or credit cards. Use a broker who submits one targeted application
- Check for errors: Review your credit report and dispute any incorrect entries
- Build positive history: Consistent on-time payments over 12 to 24 months will gradually improve your score
How a Broker Helps with Credit Issues
A mortgage broker can review your credit report before any application is made. If there are issues, they can advise you on how to improve your score before applying, or match you with a lender whose policies suit your credit profile. This avoids unnecessary application rejections that would further damage your score.