Australia has no single minimum credit score for a home loan. Each lender sets its own policy and assesses your credit report alongside your ability to repay.
A score quoted online is useful only when you know the bureau, its scale and the lender's rules. A strong number cannot cancel out a recent default.
No Single Minimum Score Across Lenders
The credit score needed for a mortgage depends on the lender and the rest of your application. Figures such as 620 often come from overseas lending rules and are not Australian home-loan minimums.
A score below a lender's policy can mean a specialist lender, tighter criteria or a higher interest rate. It can also mean delaying the application while you improve your position.
A credit check sits inside the wider home-loan eligibility assessment. Your income, deposit and existing commitments still affect the outcome.
What a Credit Score Measures
A credit score summarises the credit behaviour recorded in your credit report. Australia has two consumer credit reporting bodies, Equifax and Experian. Each calculates its own score from its own file.
These five factors help explain what a lender sees, although Australian bureau models do not assign them universal weights.
- Repayment history shows whether you meet scheduled repayments.
- Credit utilisation describes how much available credit you use. Lenders can assess this through statements, while bureau reports record credit limits and repayment information.
- Length of credit history shows how long accounts have been managed.
- Credit mix shows the types of borrowing you have. Taking out extra debt solely to create a mix adds costs and enquiries.
- Recent enquiries show applications for new credit. Several applications close together can raise concerns about reliance on borrowing.
Read the report behind the score. A reporting body can hold different information from the other, and a lender can calculate its own score.
Equifax and Experian Score Ranges
Equifax and Experian both publish Australian consumer score scales from 0 to 1,200.
Older Experian guides use a scale ending at 1,000. Use the scale printed on your report when interpreting a number or comparing it with an older result.
The former illion consumer bureau now sits inside Experian. Experian's combined report contains the information previously held by both businesses. You no longer need separate illion and Experian reports.
Even when the maximum is the same, the two bureaus use different calculations. A score of 700 from Equifax does not carry the same band or meaning as 700 from Experian.
Reading the Score Bands
Score bands describe a bureau's assessment of risk. Their names and cut-offs differ, so read the band against the correct bureau and scale.
| Band | Equifax Consumer Score | Experian Consumer Score |
|---|---|---|
| Lowest band | Below average: 0 to 459 | Low: 0 to 299 |
| Next band | Average: 460 to 660 | Fair: 300 to 499 |
| Good | 661 to 734 | 500 to 699 |
| Very good | 735 to 852 | 700 to 799 |
| Excellent | 853 to 1,200 | 800 to 1,200 |
These are the consumer bands published by Equifax and Experian. They are not lender approval thresholds.
Prime lending generally suits stronger credit files. Near-prime products can cater for applicants outside standard criteria, while specialist lenders consider more adverse histories at risk-based prices.
Those lending categories do not have universal bureau-score boundaries. An applicant in a middle band needs a policy assessment, rather than an assumption that a particular lender tier will approve them.
How Scores Affect Approval and Pricing
A stronger credit score can support better pricing, but approval depends on the full file. Lenders examine recent defaults and enquiry clusters as well as the number.
For example, two applicants with the same score can have different outcomes. One may have a recent unpaid default while the other has a shorter history with reliable repayments.
Compare the lender's credit policy and the applicant's ability to meet repayments before judging the rate. A high score alone does not guarantee approval or the lender's lowest advertised price.
How Lender Credit Overlays Change the Outcome
Lender credit overlays are the lender's additional rules for accepting a credit file. A bureau band cannot tell you whether a particular default fits those rules.
For brokers, record each default's listing date, amount and paid or unpaid status. Compare those details with the lender's policy and record the policy version used.
Check how that policy treats recent enquiries and hardship arrangements. Establish what caused the hardship and whether the applicant can now afford the proposed loan.
Financial hardship information cannot be used to calculate a bureau credit score. It can still appear on the report, so separate the score from the lender's assessment of present circumstances.
When a file falls just below a lender's criteria, use the guide to approvals with borderline credit scores for placement strategy.
Credit Utilisation
Credit utilisation is the balance you use as a share of your available limit. A $2,000 balance on a $10,000 card uses 20% of that limit.
Paying before the statement date reduces the balance on the statement if the payment clears in time. That can help when a lender reviews statements. It does not guarantee a lower bureau-reported balance or a score increase.
The commonly quoted 30% utilisation rule comes from other markets. It is not an Australian mortgage standard.
Some lenders assess the full card limit as a commitment, even with a zero balance. CommBank explains this limit-based assessment in its home-loan application guide.
Avoid new credit applications and buy now pay later sign-ups until settlement. Ask your broker whether reducing an unused limit will help your borrowing capacity before changing accounts.
How to Improve a Credit Score Before Applying
Improve your credit position by keeping repayments on time and reducing unnecessary borrowing. Start months before applying because sustained improvement takes months, not days.
- Automate at least the minimum repayments. Keep enough money in the payment account and check that each debit succeeds.
- Pay cards before the statement date when you want a lower statement balance. Keep meeting the payment due date, which is a separate deadline.
- Put extra repayments towards the most expensive balance after meeting the minimums on all debts. This reduces interest costs and helps you pay debt down.
- Stop applying for credit you do not need. Avoid multiple applications while trying to find a lender that will accept the file.
- Let accurate negative listings age while building reliable repayment history. Payment changes a default's status but does not erase it.
The score's response depends on what is already in the file and when new information reaches the bureau. A corrected error can change the picture sooner than waiting for an accurate default to expire.
Checking Reports and Correcting Errors
Request a free credit report from each reporting body every three months. You can also get a free copy after a credit refusal within the past 90 days or after a correction.
The Office of the Australian Information Commissioner (OAIC) explains these access rights. Contact Equifax on 138 332 or Experian on 1300 783 684 for help requesting your report.
Look for accounts or listings that are not yours. Check for paid debts still marked unpaid and enquiries you never authorised. A correctly marked closed account can remain in the report.
Send evidence of an error to the credit provider or reporting body. Keep the request and response, then obtain another report to confirm the correction appears.
Corrections are free, so a paid credit repair service is rarely necessary for a straightforward error. The guide to credit repair services in Australia explains when paid help merits consideration.
If adverse listings are accurate and will remain, focus on the available home-loan options with bad credit.
Credit Score Myths
Checking your own score is a soft enquiry and does not lower it. A lender's enquiry after a credit application is a different event.
Closing an old account does not immediately clean its history from your report. Account information can remain for two years after closure, while a default has its own listing period.
Closing an account eventually reduces the history available from that account. Keeping an unnecessary card open solely to preserve history can still restrict borrowing capacity through its limit.
A paid default stays listed for its five-year period, with its status updated to paid. Use the OAIC's retention periods to distinguish an expired listing from an accurate listing that still belongs on the report.
