Having a poor credit score can make the process of obtaining a home loan more challenging, but it does not necessarily mean it is impossible. In Australia, a credit score that falls below 500 is categorized as poor credit. Different lenders have different risk appetites for applicants with bad credit. By receiving proper guidance and developing a well-planned approach, getting a home loan is still an attainable goal.

Lenders who offer home loan products to people with bad credit are know as “non-conforming lenders”. These lenders will assess your credit conduct noting the type, age, number and value of the credit infractions on your credit file. These infractions can range from simple late payments, through to paid defaults, unpaid defaults, multiple defaults, judgements and writs, part IX agreement and bankruptcy. Using this information the non-conforming lender will classify the “risk profile” of your loan application and provide specific risk-based pricing.

In terms of borrowing limits, low deposit home loan options (95% lends) are available to those people with minor credit issues (ie. small paid default). If your credit conduct has larger or multiple credit infringements then a maximum 70% – 80% lending limit is likely possible.

​If you are experiencing difficulties in getting a home loan due to poor credit conduct, please give us a call on 1300 316 660. We will explore all the options to find a solution that works for you.