Is Bad Credit a Total Barrier to a Home Loan? Find Out Where You Stand

Finances can spiral out of control for many reasons – redundancy, divorce, illness. Sometimes just the pressures of daily life can see you accidentally forget to make a bill payment. It’s things like these that can land you with a bad credit rating which can stick around even when you’ve sorted through everything and paid all the overdue bills. So, just when you think you’re in the clear, others might not see it like that.

Let’s talk about the ‘bad credit’ issue and help figure out where you stand.

What is bad credit?
When you have a history of not being able to keep up with some payments and subsequently find it difficult to receive approval for any kind of new loan or credit, this is called “Bad Credit”. Some lenders may now see you as high risk as they’re concerned that you might not be able to make regular repayments on their loan.

How do you end up with a bad credit record?
There are a fair few things that can leave you with a ‘bad credit’ record. For example:

  • Having unpaid bills or loan payments
  • A divorce leaving you in debt
  • Going over your credit card limit
  • Having been declared bankrupt in the past
  • Having time off work with no pay because you were ill
  • Registered credit defaults against your name
  • A part 9 or 10 Debt Agreement
  • Your credit file having ‘too many’ credit checks run on it by potential lenders

How can you know if you have a bad credit record?
You wouldn’t really know as most of the time you would only find out when you apply for a loan. If you don’t fit their lending rules you can be labelled as “non-conforming” and regardless of whether the missed payments were small, large or even accidental you are now considered too high-risk.

What can you do?
There is good news! The major banks are not the only lenders out there and some non-bank lenders understand that a few missed payments, or even bankruptcy, can be due to circumstances beyond your control. They will speak with you one to one and find out what has been happening to try and work towards a solution for you.

So, it doesn’t mean that it’s definitely over, you do have options. There are a number of non-bank lenders who may be able to offer a solution for you. Most of the time they will have some specialist features that differ from the basic or standard variable home loan and, before making a decision, will look at your individual circumstances first.

If you’d like more information on how to get a home loan if you’ve had bad credit talk to us today. We may be able to put you in touch with a lender that can help if the major banks have said ‘no’ to your home loan application.


Bird and Young provide a range of loan solutions including home loans, business loans and loans for special financial circumstances.  Plus, we offer a free credit report and a free financial assessment without listing anything on your credit file. Call us today on 1300 469 667 or visit and find out how we can help you achieve your financial goals.



Disclaimer: Content is not intended to imply any recommendation about any financial product(s) or to constitute tax advice. If you need financial or tax advice you should consult a licensed financial or tax adviser. The information in the article is believed to be reliable at the time of distribution, but neither Bird and Young nor its accredited brokers warrant its completeness or accuracy. For information about whether a non-bank loan may be suitable for you, call us on 1300 469 667