What Credit Score Do You Need for a Home Loan?

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 score of 600 does not automatically rule out a home loan. A specialist lender may consider the application if its credit policy, income assessment and security requirements are met. The bureau and report details matter, and no published score guarantees acceptance.

A good score for mortgage purposes is one that meets the chosen lender’s policy alongside a satisfactory full application. A bureau’s “good” band describes its own model. The lender can apply a different cut-off or decline the file for another reason.

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.

A credit rating for a mortgage usually means the bureau credit score. A lender’s internal risk grade is its own assessment, using credit-report data and other application information. The bureau’s band and the lender’s grade are not interchangeable.

CreditorWatch is a commercial credit reporting business that reports on companies. Equifax and Experian hold the consumer credit files a home lender checks for an individual applicant.

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 became part of Experian in 2026. Experian’s combined report contains the information previously held by both businesses. You no longer need separate illion and Experian reports. To improve a former illion score, work on your Experian file using the same steps as any other score.

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.

Experian describes its 500 to 699 band as average and 700 to 799 as above average. It does not publish a single national average score.

Consider a hypothetical credit score of 650. The current Equifax consumer scale labels it “average”, within 460 to 660. Experian calls 650 “good”, within 500 to 699 on its current consumer scale. Both scales end at 1,200, but their bands differ.

First identify the bureau and the scale printed on the report. Then read that bureau’s band and assess the lender’s policy against the full file. A score of 650 is not an Australian home-loan approval threshold.

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.

To calculate credit utilisation, divide each card’s balance by its limit and multiply by 100. For combined utilisation, divide the total balances by the total limits. Do not average the separate percentages, because different card limits carry different weights.

Hypothetical Card	Balance	Limit	Utilisation
Card 1	$2,000	$10,000	20%
Card 2	$1,000	$2,000	50%
Combined	$3,000	$12,000	25%

Use a positive limit for each active card. A zero limit cannot produce a valid ratio. A balance above the limit produces utilisation above 100%. This ratio is neither a credit score nor a credit decision.

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.

1. Automate at least the minimum repayments. Keep enough money in the payment account and check that each debit succeeds.
2. Pay cards before the statement date when you want a lower statement balance. Keep meeting the payment due date, which is a separate deadline.
3. 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.
4. Stop applying for credit you do not need. Avoid multiple applications while trying to find a lender that will accept the file.
5. 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.

Lenders do not generally publish which reporting body they check, so review both reports before applying. If a lender refuses your application because of credit report information, its written notice must name the reporting body it used.

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.