When applying for a home loan, most people focus on income, savings, and property prices. But there’s one number that plays a big role behind the scenes—your credit score.
Whether you’re a first-time buyer, upgrading, or refinancing, your credit score can directly affect your loan approval, the amount you can borrow, and even the interest rate you’re offered.
What Is a Credit Score?
Your credit score is a number between 0 and 1,200 (depending on the credit reporting agency) that represents how trustworthy you are as a borrower. It’s based on your past and current financial behaviour.
Lenders use this number to assess the risk of lending you money. The higher your score, the better.
Credit Score Ranges (Equifax example):
- Excellent: 833 – 1,200
- Very Good: 726 – 832
- Good: 622 – 725
- Average: 510 – 621
- Below Average: 0 – 509
Why Lenders Care About Your Credit Score
When you apply for a home loan, lenders look at your credit score to help decide:
- Whether to approve your loan
- How much they’re willing to lend
- What interest rate to offer
- Whether you’ll need to provide more documentation or security
Even if you have a great income and deposit, a low credit score can make the process harder or lead to a higher interest rate.
What Affects Your Credit Score?
Your score is based on information in your credit report, including:
- Repayment history on credit cards, loans, and utilities
- Number of credit enquiries (e.g., applying for loans or Buy Now Pay Later services)
- Any missed or late payments
- Defaults, bankruptcies, or court judgments
- Length and type of credit history
Even seemingly small things like missing a phone bill or applying for too many credit cards can impact your score.
How to Improve or Maintain a Good Score
Whether you’re planning to apply for a home loan sooner or later down the track, these tips can help keep your score in great shape:
Do:
- Pay all bills and loan repayments on time
- Keep credit card balances low
- Check your credit report regularly
- Limit how often you apply for credit
Avoid:
- Missing repayments—even on small bills
- Applying for multiple loans or credit cards in a short time
- Letting accounts go to collections
How Your Score Impacts Your Home Loan
Here’s how your credit score can play out when applying for a mortgage:
| Credit Score | Impact on Loan |
| Excellent / Very Good | Fast approval, more lenders to choose from, better rates |
| Good | Still approved by most lenders, but interest rates may vary |
| Average / Below Average | Fewer lender options, higher interest, may need a specialist lender or bigger deposit |
What If Your Score Isn’t Perfect?
Don’t panic—a lower credit score doesn’t mean you can’t get a home loan. At Zodiac Finance, we work with a wide range of lenders, including those who specialise in helping clients with credit issues.
We can also help you:
- Understand your credit report
- Put together a strong application
- Find lenders who are more flexible with credit history
Final Thoughts
Your credit score is one of many pieces of the home loan puzzle but it’s an important one. Knowing your score, understanding how it works, and taking steps to manage it can put you in a much stronger position when it’s time to apply.
Need Help with Your Home Loan?
Whether you’ve got a perfect credit score or a few hiccups in your history, we’re here to help you navigate the process with confidence. At Zodiac Finance, we tailor our advice to your unique situation and help you explore the best options available.
Get in touch today to chat about your goals—we’re here to support you every step of the way.