Credit Score for a Home Loan: What Do You Actually Need?

There's no single cut-off. Every lender sets its own credit floor, and a score that gets a flat no from a major bank can be a straightforward yes at a specialist. Lenders sort files into tiers, and the tier decides your rate, your maximum LVR, and how much paperwork they'll want.

We use the Equifax scale below (0 to 1,200) because it's the most widely quoted. Your illion score sits on a 0 to 1,000 scale, so the numbers won't line up. That's normal.

Lenders rarely publish their internal credit score thresholds. The ranges below are the working estimates we use when discussing files with clients, rather than guaranteed approval criteria.

These ranges are indicative only. Actual policy varies by lender, product, deposit, income, recent credit conduct and the reasons behind any adverse events.

Once a file clears a lender's minimum credit requirements, a few extra score points may matter less than the deposit and serviceability position. Someone with a 720 score and a 5% deposit can have fewer options than someone with a 680 score and 20% down.

LVR often tightens as the score drops. A near-prime lender may consider a 550 score but require a larger deposit to offset the risk. For some borrowers, a specialist loan is a temporary step. After 18 to 24 months of clean conduct, refinancing to a prime lender may become possible.

Equifax publishes the weightings, and they're revealing:

• Credit enquiries and applications: 40%
• Repayment history: 38%
• Adverse events (defaults, court judgments): 7%
• Personal information: 6%
• Credit accounts: 4%

That top line matters. Applying for credit, any credit, moves your score more than almost anything else. The practical hits we see across the desk:

• Missed payments over 14 days late. Under OAIC rules, that's when it registers as missed on your file.
• Defaults. A payment 60+ days overdue with an amount of $150 or more can be listed as a default and stays on your file for 5 years.
• Too many applications in a short window. Three car finance quotes, two credit cards and a personal loan enquiry in six months reads as stress.
• High credit card limits. Lenders assess the limit, not the balance. A $20,000 card with a $500 balance still gets treated as $20,000 of exposure.
• Buy now pay later. BNPL accounts, applications, late fees or missed payments may appear on a credit report, depending on the provider and reporting arrangement. Lenders may also consider active BNPL commitments when assessing serviceability.

Most of the common credit mistakes borrowers make happen in the 3 to 6 months before they apply, which is exactly when they should be doing the opposite.

You're entitled to a free credit report every three months from each of the three Australian bureaus: Equifax, illion and Experian. Checking your own file is a soft enquiry and doesn't affect your score.

The numbers will differ between bureaus, sometimes by a lot, because each bureau uses a different scale and weighting. Equifax and Experian run 0 to 1,200. illion runs 0 to 1,000. Lenders don't all use the same bureau either, which is one of the reasons a decline at one bank doesn't mean a decline everywhere.

If you want the deeper breakdown of how the three bureaus score you differently, that's covered in our companion piece. This page stays on the lending question.

Yes, and this is the most expensive mistake we watch people make.

A credit check you request on yourself is a soft enquiry. A lender running a credit check to assess an application is a hard enquiry, and it leaves a footprint on your file for up to five years. Equifax assigns 40% of its published score model to credit enquiries and applications. That does not mean every enquiry causes the same point drop. The type of credit, requested amount, provider and wider pattern can all affect the result.

Now picture the shotgun approach. Applicant gets declined by their bank, so they try another, then a third, then a broker at a shopping centre kiosk, then an online lender. Five hard enquiries in six weeks. Future lenders can see the cluster of enquiries, although the credit report does not tell them whether every application was approved or declined. Even so, several enquiries in a short period can suggest rising credit demand and lead to more questions.

An automated decline is often a positioning problem, not a borrower problem. Different lenders assess overtime, bonuses, self-employed income and existing debts very differently. Our job before any application is lodged is matching the file to the lender whose policy actually fits it. That's also why pre-approval done properly is worth more than three quick online quotes.

Your current score reflects what is already recorded on the file, including enquiries, repayment conduct and adverse events. Recent conduct matters, but there is no guaranteed one-statement-cycle fix or predictable point increase. We use the following timeline to prepare a cleaner application and give lenders more recent evidence to assess.

• Pay down credit card balances where possible and review any limits you no longer need. Lenders assess your existing commitments, and a large unused limit can still reduce borrowing capacity.
• Close any BNPL accounts you're not actively using.
• Do not apply for anything. No car loan, no store card, no "quick check" of your rate at another bank.
• Set direct debits so nothing goes 14 days late.

• Build three to six clean repayment cycles across every active credit line.
• If you had a default, get it paid and marked as paid. A paid default reads very differently to an unpaid one.
• Start working on your borrowing capacity in parallel. The two levers move together.

• Defaults age. Older adverse events carry less weight.
• Consistent income and clean conduct start to compound.

One thing worth checking for couples is the weaker credit file. In a joint application, the lender reviews both applicants, and serious issues on either file can affect the outcome. A stronger applicant does not automatically cancel out recent defaults, missed payments or repeated enquiries on the other file. The exact treatment depends on the lender, so this is worth checking before either person submits an application.

Not sure where your file sits? Have a 20-minute chat with Victor before you apply anywhere.

Borrowers often focus on the score and overlook the rest of the application. Once the lender is comfortable with the credit file, the following factors can have more influence on the outcome:

• Conduct on existing debts. Lenders look at whether current loan and card payments have been made on time. Recent repayment history can carry more practical weight than a small difference in the headline score.
• Genuine savings. Most lenders want to see 5% of the purchase price saved in your name over at least three months. Gifts and windfalls are treated differently.
• Employment stability. Employment-history requirements vary. Six months in a current PAYG role and two years of self-employed financials are common reference points, but they are not universal minimums. Some lenders accept a shorter PAYG history, probation or 12 months of self-employed records when the rest of the file supports it.
• Deposit source and size. A 20% deposit removes LMI and opens doors. A 5% deposit tightens the lender list.
• Serviceability. Income minus commitments, stress-tested at the lender's assessment rate.

For self-employed borrowers, the constraint is almost never the score. It's how the lender averages your business income. One lender may use the lower of the last two years, while another averages both. Others may add back eligible depreciation or one-off expenses. Choose the wrong lender and you'll be assessed on 60% of what you actually earn.

• Equifax Australian Credit Scorecard 2025
• Equifax, What is a credit score?
• Experian Australia, Credit report and scores
• OAIC, Repayment history and defaults
• illion Access Seeker Resources