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

Quick Answer: There's no single universal minimum credit score for a home loan in Australia — it varies by lender. Most major banks require an Equifax score of 661+ (Good band) as a practical minimum. Non-conforming lenders like Pepper Money and La Trobe will consider scores below 500, but rates are 2–4% higher. An active default is often a harder barrier than the score itself — and if it was listed unlawfully, removal under the Privacy Act 1988 typically takes 30–90 days and opens mainstream lending at far better rates.

No bank publishes a single "minimum score" number on their website — they don't want to set expectations or invite borderline applications. But behind the scenes, automated credit decisioning systems apply score thresholds that determine whether your application progresses or gets declined before a human even reviews it.

Understanding where those thresholds sit gives you a target. And knowing what's possible when your score falls short gives you a plan.

Minimum Credit Score Benchmarks by Lender Type

These are indicative — not published thresholds. Lenders combine score with income, LVR, employment stability, and deposit size. A score of 640 with a 30% deposit and stable professional employment will perform differently than a 640 with a 10% deposit and casual employment.

Why an Active Default Matters More Than the Score

For home loans, the presence of an active default is often the more important barrier than the actual credit score number. Many major banks have hard-coded decline rules triggered by any active default — regardless of whether your score is 700 or 500. A score of 680 with an active default gets declined before a 580 without one at some institutions.

This is why identifying whether your default was listed lawfully is the critical first step. Defaults listed in breach of the Privacy Act 1988 — without a Section 21D notice, during an active dispute, or with an incorrect amount — can be removed professionally. Once removed, the score typically jumps 100–300 points and the automatic decline trigger disappears.

Real Case Study: Patrick, Brisbane — 638 Score, Active Default, Declined Three Times

Patrick, 47, a logistics manager from Brisbane, had spent 18 months being declined for a home loan. His income was strong. His deposit was 24%. His Equifax score was 638 — in the Average band, not dramatically low. But he had a single $510 default from a health insurer that was consistently triggering automatic declines.

During his ACS assessment, we found the insurer had listed the default while Patrick had a dispute open with the Private Health Insurance Ombudsman. Under the Credit Reporting Code, that's a prohibited listing — defaults cannot be listed during active ombudsman processes.

We challenged the listing. The insurer didn't contest it. The default was removed in 19 days. Patrick's score moved from 638 to 714.

His mortgage broker reapplied to a major bank with the updated file. Approved in 11 days.

Result: Patrick's score moved from 638 to 714 in 19 days. Three prior declines reversed. Home loan approved at 6.44% p.a. Subject to individual assessment; results may vary.

What If Your Score Is Below the Minimum?

If removal grounds exist: A free ACS assessment identifies whether any entries on your file can be challenged. If yes, removal typically takes 30–90 days and can lift your score above the minimum threshold for mainstream lending. This is almost always the better path if it's viable.

If removal grounds don't exist: Your options are non-conforming lending now (with a refinance plan to mainstream within 12–18 months), or a structured improvement plan — 12–24 months of consistent on-time repayments across all accounts, reduced credit applications, and potentially paying down outstanding balances to improve utilisation.

If you need to move now: Work with a specialist mortgage broker who has access to non-conforming lenders. Always compare the comparison rate — not just the headline rate — and model the total cost of the loan over the full term before committing.

Frequently Asked Questions

What is the minimum Equifax score to get a home loan in Australia? As a practical benchmark: 661+ for major banks, 620+ for tier 2 banks and credit unions, 550+ for non-bank lenders, and 450+ for specialist non-conforming lenders. These are not published minimums — they're practical thresholds based on how automated lending decisions work. An active default can override the score and trigger a decline even at higher score levels with major banks.

Is 600 a good enough credit score for a home loan? A score of 600 is in the Average band (460–660 on Equifax). It's below the practical minimum for most major banks but within range for some tier 2 lenders, credit unions, and non-bank lenders — particularly with a strong income, stable employment, and a larger deposit. The key question is whether any negative entries on your file can be removed to push the score higher before you apply.

What is a good credit score for buying a house in Australia? For the best mainstream home loan rates and the widest lender choice, 735+ (Very Good) is ideal. 661–734 (Good) gives you access to most mainstream lenders at competitive rates. 460–660 (Average) significantly narrows options. Below 460 limits you to specialist lenders at materially higher rates.

Can I get a home loan with a 550 credit score? Some non-bank lenders and non-conforming specialists will consider a 550 Equifax score, typically with conditions — a larger deposit (20%+), strong income documentation, and no active defaults. Rates at this level run 8.5–12.0% p.a. versus 6.0–6.8% for clean-file borrowers. On a $500,000 loan over 30 years, that difference in rate represents over $200,000 in additional interest.

Does my partner's credit score affect our joint home loan application? Yes. Joint applications involve both credit files — and lenders typically assess based on the lower score for risk purposes. If one partner has a significantly lower score or an active default, it can affect the joint application as much as if both had the same score. In some cases, applying in one name only (if one has a clean file) can be a viable strategy, depending on income.

How quickly can I raise my credit score to qualify for a home loan? If unlawful defaults are removed: 100–300 point improvements in 30–90 days are common. If rebuilding through positive behaviour: 3–18 months of consistent on-time payments typically produces 50–150 point improvements. The fastest path is always to check first whether any entries can be legally challenged before committing to a long rebuild timeline.

Know Your Exact Score — and What's Holding It Back

A free ACS assessment reviews your complete credit file across all three bureaus, identifies anything that can be challenged, and tells you what your realistic borrowing picture looks like after removal. It takes 24 hours and costs nothing.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has helped over 5,000 Australians reach the credit threshold they needed 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. General information only — not legal or financial advice. External resources: Equifax Australia | Experian Australia | ASIC MoneySmart

Related reading: Credit Score for a Home Loan → | Default Removal Services → | Credit Repair for Home Loan →