What credit score do I need for a home loan in Australia?

Australia doesn't work the way American finance articles suggest. There's no published cut-off, no single national score, and no lender that decides your application on a number alone. Three credit reporting bodies operate here — Equifax, Experian and illion — each with its own scale and its own algorithm, so you genuinely have three different scores. Equifax runs to 1,200; Experian and illion to 1,000.

What lenders actually look at

The score is a summary; the report is the evidence. Assessors read your repayment history information, which shows whether each credit account was paid on time each month for the past two years, your defaults and serious credit infringements, the number and timing of recent credit enquiries, your current accounts and limits, and any court judgments, bankruptcies or debt agreements. A clean twenty-four months of repayment history carries far more weight than a score that happens to look impressive.

What each band means in practice

Broadly: an excellent or very good score means you're likely to be accepted by mainstream lenders on standard pricing. A good score is workable and unremarkable. A fair or average score means the report will be read closely, and an explanation for anything adverse becomes important. A low score usually reflects something specific — a default, missed payments, a run of enquiries — and the fix is addressing that item, not chasing the number.

How long the bad news stays

Credit enquiries remain visible for five years. Defaults of $150 or more, where the required notices were given, stay for five years from the default date, and paying one doesn't remove it — it's marked as paid, which does help. Serious credit infringements last seven years. Repayment history information is retained for two years, which means twenty-four months of on-time payments genuinely does rewrite the most heavily weighted part of your file.

The problem of the thin file

Having no credit history is not the advantage people assume. A borrower who has never held a credit account gives the lender nothing to assess, and scoring models tend to treat absence of evidence cautiously. If you're deliberately debt-free, a single low-limit credit card or a modest account paid on time and in full for a year or two builds a usable file. Just be aware the limit will count against your borrowing power, so keep it small.

Enquiries: the self-inflicted wound

Every credit application leaves an enquiry, whether or not it was approved and whether or not you proceeded. Five applications in two months reads, to an assessor, as someone who has been declined four times. This is the practical case for not shopping your application around: work out which lender's policy fits your circumstances first, then apply once. It is also why an online pre-approval you clicked through on a whim can cost you later.

What to do before you apply

Get your free report from each of the three bureaus — you're entitled to one from each every three months, and more often if you've been declined or had a default listed. Read them for errors, because listings do get made incorrectly and can be disputed and removed. Then fix the fixable: pay off and close unused limits, make every payment on time for at least six months, and stop applying for credit. If there's a default or a rough patch with a real explanation behind it, say so up front — plenty of lenders will look past a documented one-off, and we know which ones.

The information on this website is general in nature and does not take into account your personal objectives, financial situation or needs. Before acting on any information you should consider whether it is appropriate for you. Terms, conditions, fees, charges and normal lending criteria apply. Rates are subject to change.