What is my credit rating?

Your credit rating is the category a lender places you based on your credit score. Depending on the rating you’re given, the lender views your loan application in different ways.

CBA, for example, has a five-tier credit scoring system:

  • If you’re given a credit rating of 1 or 2, then you’re considered to be a great customer.
  • If you’re rated as a 3, your loan will be assessed normally, based on its merits.
  • If your loan is rated to be a 4, your loan will likely be declined unless there is a good reason.
  • If your loan is rated 5, then it’s almost always declined.

Other major banks such as Westpac, St George, NAB, ANZ and BankWest have their own credit rating built into their loan assessment system.

As a result, it’s quite possible that you could pass with one lender but fail with another.

Credit rating vs credit score – What’s the difference?

Your credit rating is the rating (numeric: 1-5 or letters: A-D) that each lender will give you based on your home loan application, credit score, loan purpose, property value and a host of other factors.

Whereas, your credit score refers to the score given to you by credit reporting agencies such as Equifax, Experian and Illion based on your credit file.

How to check credit rating?

Your credit rating is a lender’s automatic calculation of the risk of your loan application based on your credit history, employment, stability, income and security for your loan.

The banks have their own formula for calculating a credit rating. For this reason, each lender will view the risk of your application in different ways.

You can use our credit score calculator to find out how the banks are likely to rate your application.

We have worked out which lenders see which aspects of an application to be high risk and can work out who can approve your loan, please call us on 1300 889 743 or fill in our free assessment form for more information.

Can I get a home loan with a bad credit rating?

Yes! It’s possible to get a home loan with a bad credit rating or bad credit score.

Traditional lenders such as banks are unlikely to consider your application, even if you have a good reason for the blemishes on your credit file.

We use a unique approach to find the most suitable lender for your situation:

  • First, we look to see if we can find a prime lender such as a major bank that would rate you favourably.
  • Second, we’ll look for non-conforming lenders or specialist lenders that can consider your application.
  • We’ll then compare the loans available from them and come back to you with two or three more competitive mortgages.

We’ll only help you if you’ll benefit from refinancing or purchasing. We’re not in the business of giving people loans that they can’t afford or don’t need.

If you’d like the help of one of our mortgage brokers, then please call us on 1300 889 743 or fill in our free assessment form.

What information is used to calculate my credit rating?

When the lenders calculate your credit score, they take a lot of factors into consideration so that an accurate credit rating is given for your situation.

The information that the banks assess when determining your credit rating includes:

Questions assessed Your answers How high is the risk?
What are you using the loan for? To buy a home
To buy an investment property
To refinance
To consolidate debt
To help fund your business
Negligible risk
Low risk
Low risk
Medium-high risk
Medium-high risk
Are you applying for a loan on your own? Yes
No, I’m applying with my partner
Low risk
Negligible risk
How long have you lived in your current address? 6 months
More than 6 months but less than 2 years
More than 2 years
High risk
Low risk
Negligible risk
How long have you been in your job? I’m on probation
More than 6 months but less than 2 years
More than 2 years
Medium-high risk
Low risk
Negligible risk
How are you employed? Self employed for more than 2 years
Self employed for less than 2 years
Permanent full time or part time
Employed at an agency
Low risk
Medium-high risk
Negligible risk
Medium risk
Medium-high risk
Medium-high risk
How many enquiries are on your credit file in the last 6 months? 6 or more
4 to 5
3 to 3
2 or less
Extreme risk
High risk
Medium risk
Negligible risk
Do you have any credit problems? I’m bankruptcy
I’m discharged bankrupt
I have more than 2 defaults
My defaults are over $1,000
I’ve yet to pay my defaults
I have 2 or less paid defaults, which are less than $1,000
Very high risk
Have you missed payments on your current debts? Yes, but it was more than 6 months ago
Yes, within the last six months
No, I never miss repayments
Medium risk
Very high risk
Negligible risk
How much are you borrowing? $0 to $300,000
$300,001 to $500,000
$500,001 to $750,000
$750,001 to $1,000,000
More than $1,000,000
Negligible risk
Low risk
Medium-high risk
Medium-high risk
Very high risk
What percentage of the property value (LVR) are you borrowing? Less than 60%
Between 60% and 80%
Between 80.1% and 85%
Between 85.1% and 90%
Between 90.1% to 95%
Above 95%
Negligible risk
Low risk
Medium risk
Medium-high risk
Very high risk
Extreme risk
Do you have any genuine savings or shares (gifts not included)? I have more than 10% of the purchase price in savings
I have more than 5% of the purchase price in savings
I have 3% of the purchase price in savings
I have no savings
I have equity in an existing property
Negligible risk
Low risk
Medium risk
High risk
Negligible risk
What is your net asset position (assets minus liabilities) like? More than $1,000,000
More than $100,000
More than $25,000
Between $0 and $25,000
I own nothing
I own nothing and I’m an income of over $100,000
My liabilities are more than my assets
Negligible risk
Negligible risk
Low risk
Medium risk
Medium-high risk
Very high risk

What is failing a lenders credit rating?

In some cases, when someone applies for a mortgage, the lender will reply that they’ve failed the lender’s credit rating.

This means that the overall risk of your application has been assessed by their computer system and has been deemed to be too high.

Did you know that not every lender will rate your application? If you’ve been declined for no apparent reason, then we can often apply with a lender that uses a common-sense approach to loan assessment.

Of course, if you aren’t creditworthy, then you can’t get a loan. However, if you feel that you should’ve been approved then consider talking to us.

Does Equifax give me a credit rating?

Equifax (which acquired Veda Advantage) holds a credit file for all Australians who’ve applied for any form of credit.

In the past, Veda didn’t have any score on your credit file. They merely provided to lenders a list of loans you’ve applied for along with black marks such as defaults.

Nowadays, Equifax has its own score on your credit file, known as your Equifax Score (previously VedaScore).

It’s the lender that then uses this information to give your loan a credit rating, which is used to categorise you as a good or bad borrower.

Does making payments on time improve my rating?

Yes! If you have many years of experience in borrowing and repaying loans, then lenders are more likely to trust you with future commitments.

Beware of being labelled a “credit junkie”, it’s better to have one or two credit cards that are paid on time then to have too many debts as you’ll be seen as someone that can’t control their spending.

In the past, if you had a track record of perfect payments on a car loan with Westpac then generally Westpac would give you a higher credit rating than a bank such as ANZ or NAB that you’ve never had any history with.

However, since 2014, all lenders now have access to your repayment history information, even if you’ve never had a loan with them.

Just as you wouldn’t lend money to people you don’t know; banks are warier of lending to people that they have no positive dealings with in the past.

Will having an open bank account improve my credit rating?

Yes, if you have a bank account open with a lender, then this will give you a credit rating with that lender. To get the best possible rating, your account must:

  • Never be overdrawn.
  • Always have a healthy balance (i.e. not running out of money prior to payday).
  • Few ATM withdrawals from pubs and clubs.
  • Be open for at least 6 months.
  • Generally have an increasing balance.

The information about how you use your bank account is combined with the information on your credit file to create your credit rating for your loan application.

How can I find out my personal credit rating?

If you ask your bank to check your credit rating, then they can often tell you if their system has given you a good or bad rating based on the way you’ve used your cheque account.

You can write to Equifax directly, and they can give you a free copy of your credit file. The best way to work out if you’d be seen as a high risk for a home loan is to use our credit score calculator.

Apply for a home loan

Our mortgage brokers are specialists in the credit scoring algorithms used by the major banks.

Please complete our free assessment form or call us at 1300 889 743 and one of our mortgage brokers will contact you to discuss how we can help you to apply for a home loan.

Why use us?

We aim to set an example by delivering what we promise: a higher level of service, better advice and better home loans.


Australia-wide services

We finance properties anywhere in Australia for people anywhere in the world.


Get incredible interest rates

Our relationships with our panel of lenders allow us to negotiate your interest rate.


We get tough loans approved

We can help you navigate the often complex pre-approval and application process.


Our customers love us

We receive hundreds of love letters from our customers.

Discover more reasons to use Home Loan Experts

How we find you the right solution

We get a complete understanding of where you’re at and what your ultimate goals are.
You’ll get a recommendation in just a few simple steps.

enquiry form icon

Complete our free assessment form or call us.

lender search icon

We assess your situation.

panel of lenders icon

We look at all the options from our panel of lenders.

recommended deal icon

We will find you the most suitable home loan deals.

Testimonials for Home loan experts

about us


lenders on
our panel


lent Australia-wide
and counting

Westpac Logo
ANZ Logo
NAB Logo
AMP Logo
Qudos Bank
Firstmac Logo
CommonwealthBank Logo
St.george Logo
ING logo
Homeloans Logo
Macquare bank logo
Suncorp logo
pepper money logo
mebank logo
bankwest logo

of our borrowers get
approved with a major bank


of our borrowers get a discount
below the bank standard variable rate