By having a greater understanding of your credit score, the potential impact(s) and things you can do to change your credit score, you’ll be in a better position to ensure it doesn’t hold up the application process or worst case, prevent you from obtaining your finance.
Posted in: Insights
What score do I need to get a home loan?
Unfortunately Lenders do not reveal their credit requirements, which makes this hard to identify. However, the majority of lenders will look at a range of credit characteristics, in combination with your credit score to determine your credit worthiness. Anywhere from 'good to excellent' in combination with good savings history is the best place to start, but that won't paint the whole picture.
How is my score calculated?
- number of credit enquires
- type of credit applied for
- court writs or judgements
- payment history
What’s a good credit score?
- Excellent = 800 - 1000
- Very Good = 700 - 799
- Good = 625 - 699
- Fair = 550 - 624
- Weak = below 549
What affects your Credit score?
- defaulting on credit accounts
- negative data (such as defaults) removed from your credit report
- multiple credit applications in a short space of time
- repaying a default
- bankrupcies and Debt agreements
- adding a new credit account
- payment history
- having excessive open credit accounts
- having too much unsecured credit
- having a combined credit limit that’s too high
How can you improve your credit score?
- space out credit enquiries
- make sure all your providers have your contact information
- consider consolidating your debt
- check your credit score regularly
- make loan repayments and credit card debt on time
If you have any questions regarding how your credit score may impact your application, contact one of our experienced Mortgage Brokers for a chat on 8300 8300
*The information provided in this article is general in nature and does not take into account your personal circumstances. Since everyone's personal situation is different, this article should not be taken as advice. The figures used in this article are to be used as a guide only. Depending on your personal circumstances, these numbers may vary. We recommend you seek individual advice with a mortgage broker.