Credit Score Needed for a Home Loan in Australia (2026)

Quick Answer: For a home loan in Australia, most mainstream lenders require an Equifax score of at least 660 (Good band). The major banks typically want 680+ with no active defaults. Non-conforming lenders will consider scores below 500 but at rates 2–4% higher. If defaults on your file were listed in breach of the Privacy Act 1988 and Credit Reporting Code, professional removal in 30–90 days can lift your score into the approval range and save hundreds of thousands in interest over the loan term.

Your credit score is one of the most important numbers in a home loan application. Not because lenders rely on it alone — they also look at income, deposit, employment history, and existing debts — but because it's the first filter. Below a certain threshold, the application doesn't get a human review.

This guide gives you the exact score thresholds by lender type, explains why the presence of a default matters more than the score in many cases, and shows you the fastest path to approval if your score isn't there yet.

Credit Score Requirements by Lender Type

These are indicative ranges. Actual requirements vary by lender policy, loan type, deposit size, and individual circumstances. The presence of an active default often matters more than the raw score — many lenders apply automatic decline rules for any default regardless of score.

Why the Presence of a Default Matters More Than Your Score

You can have an Equifax score of 690 and still be declined by every major bank — if you have an active default on your file. Lenders don't just look at the number; their assessment engines scan for specific negative entries before the score is even considered.

A default tells a lender that at some point, a credit provider found it necessary to formally record a payment failure against you. Even if your score has recovered, the default remains as a red flag for most mainstream lenders until it expires.

This is why understanding whether your default was listed lawfully — and whether it can be challenged — matters so much. An unlawfully listed default removed in 60 days changes your entire eligibility landscape overnight.

What Score Do You Need for the Best Home Loan Rates?

Getting approved and getting the best rate are two different targets.

Moving from Average to Good (from 600 to 680 on Equifax, for example) can mean the difference between a non-conforming rate and a mainstream rate. On a $500,000 loan over 30 years, that difference can exceed $250,000 in total interest.

Real Case Study: Claudia, Perth — 623 to 741. Approved by Commonwealth Bank.

Claudia, 35, a dental hygienist from Perth, had been saving for a home deposit for four years. She had $110,000 saved on a $490,000 property — well above the 20% threshold. Her income was stable. Her only obstacle: a $560 default from a previous gym membership contract that had been listed 14 months earlier.

Her Equifax score was 623. Her mortgage broker told her she'd need to wait three and a half more years for the default to expire, or accept a non-conforming loan at 9.1% p.a. — adding approximately $229,000 in extra interest over 30 years compared to the mainstream rate.

During her ACS assessment, we found that the gym had listed the default without issuing the required Section 21D pre-listing notice under the Privacy Act 1988. The procedural breach was clear and well-documented.

We lodged the challenge. The gym's parent company acknowledged the breach within 18 days. The default was removed on day 29.

Result: Claudia's Equifax score moved from 623 to 741 in 29 days. Her mortgage broker reapplied through Commonwealth Bank. Approved at 6.19% p.a. — mainstream rate, no non-conforming conditions. Compared to the 9.1% quote she'd been given with the default on her file, the interest saving over 30 years on her loan was approximately $229,000. She only paid when we succeeded. Subject to individual assessment; results may vary.

How to Raise Your Credit Score for a Home Loan

1. Get your credit report from all three bureaus — Equifax, Experian, Illion
2. Identify every negative entry — defaults, enquiries, missed payments
3. Assess each entry for removal grounds — no Section 21D notice, disputed at listing, incorrect amount, statute-barred
4. Engage professional removal if viable — 30–90 days for most successful challenges
5. Stop all new credit applications — each one adds a hard enquiry and delays recovery
6. Pay every current bill on time — 24 months of clean CCR data improves your score steadily
7. Reduce credit card utilisation — below 30% of available limit across all cards
8. Work with a mortgage broker who knows both the credit landscape and lender credit policies — find ASIC-licensed brokers at asic.gov.au

Frequently Asked Questions

What is the minimum credit score for a home loan in Australia? There is no universal minimum — each lender sets its own threshold. As a guide: major banks generally want 680+ on Equifax with no active defaults. Tier-two banks will consider 650+. Non-conforming lenders accept scores from 500 downward. The presence of an active default is often a harder barrier than a low score alone.

Can I get a home loan with a 600 credit score in Australia? Possibly — some tier-two banks and credit unions will consider scores in the 580–640 range, particularly with a strong deposit and stable income. The specific entries on your file matter as much as the number. If a default is causing the low score, removing it often moves the score above the approval threshold within 30–90 days.

Does my credit score affect my home loan interest rate? Yes, significantly. Lenders price home loans based on assessed risk, and your credit score is a key risk signal. Borrowers in the Excellent band (853+ Equifax) access the best available rates. Borrowers in Average or Below Average band pay higher rates — often 2–4% more on non-conforming products. Over 30 years, a 3% rate premium on a $500,000 loan adds approximately $290,000 in total interest.

How long does it take to improve your credit score enough for a home loan? Removing an unlawfully listed default can move your score into the approval range in 30–90 days. Rebuilding through consistent on-time payments and reduced applications takes 6–24 months for meaningful improvement. If you have specific entries that can be challenged, credit repair is almost always the faster path to home loan eligibility.

Will my credit score affect how much I can borrow for a home loan? Yes. Lenders calculate your borrowing capacity based on income, expenses, and risk profile. A lower credit score means higher assessed risk, which can reduce the maximum loan amount they're willing to offer — even if your income supports a larger loan. A clean credit file with a high score maximises both approval chances and borrowing capacity.

Can I get a home loan if I've been bankrupt in Australia? Mainstream lenders typically require 2–3 years since discharge and a fully rebuilt credit file. Non-conforming lenders may consider applications 1–2 years post-discharge with strong income and a sufficient deposit. Bankruptcy listings remain on your file for 5 years from discharge or 7 years from filing — whichever is longer.

Find Out If Your Score Can Reach Approval Level This Month

A free assessment from ACS tells you whether the entries holding your score below the home loan threshold can be challenged — and how quickly. For many clients, the path from rejection to mainstream approval is shorter than they expected.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has helped over 5,000 Australians get home-loan-ready since 2014. No Win No Fee. 98% success rate on accepted cases.

Get My Free Assessment → 📞 0489 265 737 🛡️ ASIC Licensed ACL 532003 | ⭐ 4.9/5 from 976+ Reviews | 🏆 Award Winner 2022–2024

Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.

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