Last Updated: 6th December, 2022

Can I still get a home loan without any credit history?

Some banks and lenders are willing to lend even if you have no credit history.

However, it’s often easier if you take time to build a credit history rather than apply without one.

Why do I need to have a credit history?

Credit history plays a big part in the bank’s decision on whether they approve your loan or not. That’s because the banks consider how you managed your finances in the past as an indication of how you’re going to behave in the future.

Since they can’t check that without a credit history, it would be difficult for them to know whether you can be trusted to borrow a large sum of money. No credit history also means no credit score.

So does this mean that the banks will automatically decline your application for a home loan since you don’t have a credit history yet?

There’s good news. Even if your credit file is empty, you can still qualify for a home loan with some lenders.

How can I qualify?

Lenders are in the business to make money. Therefore, they want to know if you can repay your mortgage. If you have bad credit records, major banks will view you as an irresponsible borrower. Although you can still get a bad credit home loan, it’s going to cost you more in interest.

While not having a credit history isn’t the same as having a bad credit record, it’s still a risk in the lender’s eyes. That’s because you’re unable to show any experience in managing your debt and finances.

Despite this, some lenders can consider your loan application if you have a strong income and stable employment.

Our mortgage brokers specialise in tough home loans and can help you create a strong loan application. We also have relationships with almost 40 lenders all over Australia and know which ones can offer no credit history home loans.

You can discuss your situation and loan needs with one of our mortgage brokers by calling us on 1300 889 743. You can also complete our free online assessment form and one of our mortgage brokers will call you instead.

Are the interest rates higher?

No, even if you are getting a no credit history home loan, we can help you find the same interest rates as standard home loans.

However, if you have a bad credit history and are just looking for no credit check home loans, you’re out of luck. This is because, currently, there are no lenders that skip credit checks.

Will my credit history overseas affect my application?

Overseas credit history won’t affect your home loan application in Australia.

In most cases, Australian lenders can’t access the credit files overseas. However, some banks in New Zealand have links to Equifax (which was previously Veda Advantage in Australia) and credit files in those banks can be accessed by an Australian bank.

Limited choice of lenders

When you first apply for a mortgage, your credit file will be created. Having no credit history means your credit score can’t be assessed.

As such, many lenders may not accept your application because they can’t be sure if you can manage your home loan.

Only a limited number of lenders offer no credit history home loans. This means that you won’t have many options to get the most suitable features for your situation.

If you want more lender choices and better mortgage deals, you’ll have to build up your credit history.

What if I don’t have any savings?

You still can get a home loan if you don’t have deposit. With a guarantor home loan, you can avoid a deposit as well as the requirement for genuine savings, which are basically savings you’ve held or collected in a bank account for at least three to six months.

If you don’t have a guarantor, you’ll need to have a deposit of at least 10% of the property value. Without this amount, it’s unlikely that lenders will approve your home loan application.

However, note that there are other no deposit home loan solutions such as using equity as your deposit.

Start building a good credit history

By building a good credit history, you can qualify with more lenders and consequently more products and offers. If you can, try to establish your credit history and improve your credit score before you apply for a home loan by:

  • Beef up your credit track record: Create a bank account, get a credit card, mobile plan, or internet service as proof of your payment records. Make sure everything is registered in your name and listed at your residential address.
  • Always pay on time: Pay your bills on time every time. Paying your credit card bills in full every month can help you create a good credit history.
  • Cultivate bank relationships: Build a good relationship with your bank. Have your salary paid directly to your bank account and avoid any overdue fees.

Disclaimer: Please note that the above tips should be used as a guide only. Please speak with a professional financial expert for financial advice.