Not all lenders look at judgments on face value

Most prime lenders such as major banks will not lend to a person who has a judgment

However, you may still be able to get a loan with a specialist lender:

  • You can borrow up to 90% of the property value.
  • You must provide a written explanation for your judgment.
  • Some lenders will require you to pay the judgment if it has not yet been paid.

Please enquire online or call us on 1300 889 743 to speak with one of our mortgage brokers and find out whether you can qualify for a home loan.

What do lenders know about my court judgment?

Credit providers will see the court judgment on your credit file.

It is gives them an indication that you have been in financial trouble that you have been unable to resolve.

However, they don’t know the full details of exactly what happened and whether you were at fault or not.

They only know that the court ordered you to pay the other party and that you did not make this payment on time or at all.

They will ask for an explanation behind the judgment and will consider your reason when assessing your home loan application.

A major bank will always assume the worst!

This is why mainstream lenders are very unlikely to consider your application even if you provide full evidence of what has happened.

What does a judgment on my credit file mean?

From a bank’s point of view, a court judgment:

  • Shows that the person was unable to come to a suitable agreement with the creditor without resorting to legal action.
  • Shows that there has been legal action which raises the possibility that there may be other legal action going on.
  • Is a very high risk and will affect your credit score.

Paid or unpaid judgments?

Judgments are worse than defaults because they are court orders.

These are directives to pay a debt of which you have breached the terms and they stay on your credit file for five years whether or not the default has been paid.

It is still better if you pay out the debt so that the judgment can appear as “paid” on your credit file rather than remaining as “unpaid”.

Please discuss this with one of our mortgage brokers before you pay an outstanding judgment.

What is a judgment?

Debt judgments relate to court proceedings held by a magistrate in which a person owes a debt to another party.

For example, if you have a mortgage and your repayments are not made on time and in full, then you are in default under the loan contract.

When this happens, the lender has the right to take you to court to recover the money you owe.

It’s important to know how a judgment will affect your application for a mortgage so that you apply with the right lender.

The key points that you should know about judgments are:

  • Judgments are put on your credit file when an order made by a magistrate for you to pay a debt has been made.
  • A judgment will remain on your credit file for five years.

Please call us on 1300 889 743 or enquire online and one of our specialist mortgage brokers will determine which lenders can approve your loan.

  • Nolan

    If one has a judgement in one’s record, will one be eligible to take a home loan if it has been paid?

  • Hi Nolan,

    The judgement stays on one’s record for 5 years, and the lenders will ask for an explanation behind the judgement. There’re specialist lenders who will provide you the home loan. Moreover, since it has been paid, there’re chances you will get a home loan with a specialist lender.

  • Kirtley

    Why are lenders very wary all of a sudden when they find someone with a judgment even if it’s already been paid off and was a while back?

  • Hello Kirtley,

    It can be mainly because from a bank’s point of view a court judgment generally shows that the person was unable to come to a suitable agreement with the creditor without resorting to legal action, and that there’s been legal action which raises the possibility that there may be other legal action going on. This is overall a very high risk, and also affects your credit score.

  • Kirtley

    That does make sense… but my judgment was like a few years ago and paid off in full in no time. Can you guys help me out here?

  • We’ll need to assess your situation properly to come up with a set of lenders with the most flexible policy for your situation and able to lend. Please call 1300 889 743 to discuss this with one of us or simply enquire online:

  • Semmens

    What’s the max loan amount when borrowing at 90% LVR?

  • Hey Semmens,

    Most lenders will only approve a 90% mortgage up to $1 mil. They will only allow you to borrow more than this if you have multiple properties as security for the home loan. This is due to policy restrictions from the mortgage insurers. However, one of our banks has an agreement with their mortgage insurer and so can consider a 90% loan up to $2 mil for people who are in an exceptionally strong financial position.

  • Mike

    My parents have 2 judgments on their credit that were not paid. They are about 8-10 years old. A lender told them those will never drop off their credit so they are getting ready to file bankruptcy. Is this true?

  • Hi Mike,
    No this is not true. Judgements stay on for 5 years so their credit file should be clear now. In some situations the judgement can be re-listed for another 5 years but this is rare.

  • Mike

    how do i apply? i tried get a free assessment but it says valid contact number is required..

  • If they need help with a home loan then yes they can contact us. We’d need a valid contact number. If they don’t need a home loan then best they get a copy of their credit file from here

  • Mike

    is this available for a home in the united states?

  • I don’t know sorry. The information I have given is for Australia.

  • Rebecca Roberts

    only five years?

  • Yes that’s correct. You can get a copy of your credit report to check.

  • Brenda Durham

    I have a judgement on a car loan that I voluntarily surrendered and they take it out my check every week can I still get a loan?

  • Hi Brenda,
    We specialise in home loans so I can’t say for other types of debts. Howeverfor a home loan yes you can qualify with a specialist lender as long as you have a large deposit (10 – 15% of the purchase price) or are refinancing and you owe less than 80% of the property value.

  • Tuli Telea

    Can I ask please … Who are your special Lenders please?

  • Hi Tuli,
    You can view a list of our lenders here
    To recommend a specific lender we’d need to complete an assessment of your situation.

  • Tuli Telea

    Thank you

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  • Morkel

    I have had a judgement a couple of years. I have already paid it. Do I have to wait for certain time period after having a court judgement to apply for a home loan?

  • Hi Morkel,
    Court judgement stays on your credit file for 5 years, and major lenders will view it more conservative manner. However as you have already paid it we have some specialist lenders on our panel who could assist you for a home loan. Please call us on 1300 889 743 or enquire online and one of our specialist mortgage brokers will help you get approved!

  • Pascal

    Hi there I was just wondering what effect a paid court judgement would have when applying for a home loan?

  • Hi Pascal,
    Paid court judgements are treated the same as defaults by most lenders when applying for a home loan. That is to say, with most prime lenders you’ll likely fail their credit scoring and get knocked back. Specialist lenders are generally very good with bad credit home loans. Depending on the judgement amount and when it was paid you can still qualify for a home loan with competitive interest rates. Give us a call on 1300 889 743 or fill in our online assessment form to find out if you qualify: