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

Quick Answer: Most mainstream Australian lenders — the Big 4 banks and second-tier lenders — want a credit score of 650 or above (Equifax scale, 0–1,200) for standard home loan approval. Some require 700+. Non-conforming and specialist lenders will consider applications with lower scores but charge substantially higher rates. The most effective strategy for borrowers below the threshold is to have any unlawfully listed defaults removed under the Privacy Act 1988 — which can raise scores 100–200+ points in 30–90 days — then apply at mainstream rates. Every percentage point on a $500,000 mortgage over 30 years represents approximately $100,000 in interest.

You've found the property. You've got your deposit. But your credit score is sitting in the wrong place. What does it actually take to get a home loan in Australia in 2026?

The answer depends on which lender you approach, how your income and deposit look, and — critically — what's causing the score to be where it is.

Credit Score Thresholds by Lender Type

These are approximate — no lender publishes exact credit score floors, and assessment involves multiple factors beyond score alone. However, these ranges reflect real-world approval patterns in the current market.

What Lenders Actually Assess (Beyond the Score)

A credit score is a starting signal, not the whole picture. Every lender also weighs:

Deposit size (LVR) — a 20%+ deposit offsets credit risk substantially. A borrower at 650 with 25% deposit gets treated differently to the same borrower at 90% LVR.

Income stability — 2+ years of stable employment or self-employment income. Consistent, documentable income is arguably more important than credit score for some lenders.

Repayment conduct on the existing home loan — if refinancing, how you've managed current repayments over the past 24 months matters enormously.

The reason for credit issues — a medical event or redundancy that caused a temporary period of difficulty is viewed differently to a pattern of avoidance.

Number of credit enquiries — a clean score with 8 recent enquiries raises flags. Lenders want to see why you applied so many times recently.

The Real Cost of Applying Below the Threshold

Over 30 years, applying with a damaged credit file versus a repaired one can cost over $300,000 in additional interest on a $500,000 loan.

What to Do If Your Score Is Below the Threshold

Step 1: Understand what's causing the low score

Get all three credit reports — Equifax, Experian, and Illion — and identify every negative entry. You need to know specifically: are there defaults? Court judgements? Too many enquiries? Inaccurate information? Each has different implications and different solutions.

Step 2: Assess whether any entries are removable

Under the Privacy Act 1988 and the Credit Reporting Code, defaults that were listed without a valid Section 21D pre-listing notice, with an incorrect amount, or during an unresolved dispute, can be removed before the 5-year retention period ends. This is the fastest way to raise a score significantly.

Telco and utility defaults — the most common source of credit score damage in Australia — are frequently listed in procedural breach. A single removal from a telco default can raise an Equifax score by 80–150 points.

Step 3: If removal is viable, pursue it before applying

Applying for a home loan with a removable default on your file is paying an enormous interest premium for a problem that has a solution. Even a 60-day wait for removal — followed by a mainstream approval at 6.2% instead of 9.4% — saves you hundreds of thousands of dollars over the loan term.

Step 4: If not removable, work with a specialist broker

Non-conforming lenders will approve home loans with defaults on file. Rates are higher. Engage a specialist mortgage broker — not a direct bank — who has access to the full non-conforming lender panel and can match your profile appropriately.

Get a free assessment from Australian Credit Solutions →

Real Case Study: Brendan, Sunshine Coast — Score 489 to 701, Home Loan Approved

Brendan had been saving for 4 years and had a $95,000 deposit for a $480,000 property — a strong 19.8% deposit position. His problem was his Equifax score: 489. Two defaults sat on his file — a $720 Telstra account from 2022 and a $410 AGL energy account from 2023.

His mortgage broker told him he'd need to go non-conforming — the quote came back at 9.1%. Brendan contacted Australian Credit Solutions to see if any alternative existed.

We reviewed both defaults. The Telstra listing had been made without any Section 21D notice being issued at all — Telstra's own records showed the pre-listing notice was never sent. The AGL listing had been sent to Brendan's old address despite Brendan having updated his contact details with AGL 4 months before the notice would have been required.

Both grounds were strong. Both disputes were lodged immediately. The Telstra default was removed in 24 days. The AGL default took 41 days.

Brendan's Equifax score moved from 489 to 701. He reapplied — this time through his own bank. Approved at 6.18% on $385,000.

The difference over 30 years compared to the 9.1% non-conforming quote: approximately $276,000 in saved interest.

He only paid when we succeeded.

Frequently Asked Questions

What credit score do I need for a home loan in Australia in 2026? Most mainstream lenders want a score of 650 or above (Equifax scale). The Big 4 banks typically want 700+. Non-conforming lenders will consider lower scores but charge 2–4% above standard rates. Deposit size, income stability, and loan conduct history all factor alongside the credit score. If your score is below the threshold due to removable defaults, credit repair is often faster and cheaper than waiting or accepting specialist rates.

Can I get a home loan with a 600 credit score in Australia? Some second-tier banks and credit unions may approve at 600, particularly with a strong deposit (20%+) and stable income. Most Big 4 banks will decline. Specialist lenders will approve but at higher rates. If the score is 600 due to removable defaults, professional credit repair may raise it to 650–700+ within 30–90 days. Subject to individual assessment.

Does a default automatically disqualify me from a home loan? Not automatically — non-conforming lenders will approve with defaults on file. However, it significantly raises your rate and may limit your LVR to 80% or less. If the default was listed unlawfully, removing it is usually the better path — it eliminates the disqualification and opens mainstream lending at substantially lower rates.

How long do I need to wait after a default to get a home loan? With a non-conforming lender, there's no mandatory wait — you can apply with recent defaults. Mainstream lenders generally want defaults to be at least 2–3 years old with clean repayment history since. If the default is removable, the wait is only as long as the removal takes — typically 30–90 days.

Does applying for a home loan affect my credit score? Yes — a home loan application creates a hard enquiry on your credit file, which stays for 5 years and can reduce your score by 10–30 points. Multiple applications in quick succession compound the damage. Work through a mortgage broker who can place one clean application rather than applying directly to multiple lenders.

Can I get a home loan with no credit history in Australia? Some lenders will assess first-time borrowers with no credit history on alternative criteria — rental history, utility payment conduct, and employment stability. Credit unions and smaller lenders are often more accommodating than the Big 4. Building credit history through a small credit card used and paid off monthly for 6–12 months before applying can help significantly.

Find Out What Your Credit File Looks Like

Get a free assessment and find out exactly where your score stands, what's causing any damage, and what the fastest path to home loan approval looks like for your specific situation.

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Related Reading:

• Credit repair for home loan approval
• Bad credit home loan Australia
• Default removal services Australia

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.