- Lenders will take your credit history and score into account before approving you for a home loan.
- Your credit history takes into account your repayment history for other debts, your credit applications, and adverse 'credit events' like bankruptcy.
- Making repayments on time, not applying for too many different products, and regularly checking your credit report for mistakes are good ways to improve your credit score.
Your credit history is part of the due diligence lenders will do before writing a home loan.
How does a credit report work?
Your credit history is comprised of things like your repayment history and applications you've made for other credit products. The credit reporting bureaus give you a score, normally between 0 and 1,200, then when you apply for another credit product, the lender in question can check your credit report and score. Positive conduct (paying bills on time for example) improves your credit score, while negative conduct (missed loan repayments, bankruptcy) hurts it.
What gets recorded on a credit report?
Per the Office of the Australian Information Commissioner, these are the credit events that are recorded in your report, as well as how long they will remain on there for:
| Credit event | Stays on your credit report for |
|---|---|
| Bankruptcy | The later of: 5 years starting on the day you became bankrupt, or 2 years starting on the day you were no longer bankrupt |
| Court judgment | 5 years |
| Credit enquiry | 5 years |
| Current consumer credit obligations | 2 years (from the end of the consumer credit) |
| Debt agreement | The later of: 5 years from the day the agreement was made, or 2 years from the day the agreement was: terminated ends when the agreement ends under s 185N of the Bankruptcy Act 1966 an order was made declaring the agreement void |
| Default | 5 years |
| Financial hardship information | 1 year |
| Repayment history | 2 years |
| Serious credit infringement | 7 years |
What's a good credit score?
There are three different credit reporting bureaus, all with slightly different scoring systems. As a general guide though, here's the scoring system at Equifax:
- 0-459: Below average
- 460-660: Average
- 661-734: Good
- 735-852: Very good
- 853-1200: Excellent
Savings.com.au's two cents
Your credit history is an important part of a home loan application. If you have a chequered credit history you might find you'll be charged higher interest rates or even have your application rejected outright. Even if you aren't looking for a mortgage right now, being blasé about paying your bills or your Afterpay repayments on time can hurt down the line when you do decide to enter the market.
If the damage is already done and an ordinary credit report is holding you back from getting approved, there are some specialist 'bad credit' lenders that might be more willing to deal with you. You could also look into getting a credit repair lawyer that might be able to look at the detail on your credit report and see if there's anything that can be added or removed that could quickly improve your score.
How can I improve my credit score?
If you've got a dodgy credit history the most important thing to remember is that nothing lasts forever. Even a bankruptcy will eventually be wiped from your record, so over time your score will improve provided you aren't repeating the same mistakes.
If you're looking to improve things quickly though, there are a few things you can do:
Check your credit report.
Incorrect information on your credit report could be hurting your credit score. Things to keep an eye out for include:
Duplicate listings or incorrect amounts of debt owed
Credit you didn’t take out
Repayments you made that haven’t been recorded
If you find any mistakes, you should be able to contact the relevant credit reporting body for them to fix it free of charge.
Pay things on time
Your repayment history is one of the most important components of your credit score, so the more you repay your existing credit obligations on time and in full, the stronger your score will be. Even things like utility and phone bills, while not technically credit products, can still hurt your score if you miss a payment, so you should always make sure not to miss payment for anything.
Minimise credit applications
Any credit application you submit, regardless of whether it's approved, shows up on your credit report and can affect your credit score. If you submit too many home loan or personal loan applications in a short time, it can hurt your score, so be careful about how many applications you make at once.
Frequently asked questions
Who collects your credit scores?
There are three major credit reporting bodies in Australia:
- Equifax
- Experian
- illion
How do you check your credit report?
Credit reporting bodies have to let you see your consumer credit report for free at least once every three months. If you've been refused credit within the past 90 days or there's been a correction made to your credit history, you can also request a free copy.
How does BNPL affect your credit score?
According to Equifax, there are a couple of ways that BNPL platforms like Afterpay can impact your credit report:
- Credit checks: Since June 2025, BNPL has been considered a credit product like credit cards or personal loans. That means any time you apply for a service like Afterpay, it likely involves a credit check, which is recorded on your credit report.
- Repayment history: Your repayment history with BNPL platforms is recorded on your credit report for the following two years. Regularly making your payments on time can improve your credit score, while missed or late payments can hurt it.
How do personal loans affect your credit score?
Personal loans can help or hinder your credit score depending on whether you're consistently on time with your repayments. As personal loans are a credit product your repayment history is recorded on your credit report for up to two years after they are due, so being on time improves your score while missing payments brings it down.
Any time you apply for a personal loan, it's recorded on your credit report as a 'credit enquiry'. Too many in a short space of time can also hurt your score, so it's worth shopping around to find suitable products before you start firing off applications.