What Credit Score Does An Expat Need to Get An Australian Mortgage?

Applying for a mortgage/home loan in Australia can be a challenging process with many elements. One of the significant factors lenders and mortgage brokers will consider is your credit score; they check your score and look into your credit history to see if they can trust you to borrow money. Therefore, an expat needs the best credit score possible to get a home loan.

Continue reading our guide to find out the best credit score for an expat who needs an Australian mortgage. Additionally, you can find out the minimum credit score an expat needs for an Australian mortgage, how you can improve your score, and more!

The Definition Of A Credit Score

Credit scores are numbers that lenders use to determine if they can trust you to make on-time payments. Credit scores usually range between 0 and 1200. However, you should check with the credit bureaus to determine their exact credit score range.

If you have higher credit, lenders will find you more trustworthy and will be open to negotiation.

What Credit Score Do You Need to Get An Australian Mortgage

How Does A Lender Calculate A Credit Score?

A lender will use a credit bureau to scan your credit file and compile information to calculate your credit score. They gather this information from various sources (banks, government, etc.).

  • Any existing loans you have on your credit file.
  • Any open credit cards on file.
  • Any missed payments or repayments.
  • On-time payments for bills (utility bills, tax bills, etc.).
  • Any public records on your credit file (bankruptcies, tax liens, etc.).

A credit bureau takes all of these factors into account to calculate your credit score.

What Is A Fantastic Credit Score For An Expat In Australia?

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There are many score ranges for credit scores; an excellent credit score starts at around 700 and can go up to a perfect score of 1200. However, you need to check with your credit bureau and lender to find their specific ranges and criteria. If you’re an expat with a higher credit score than 700, you can access improved loan terms and interest rates.

Here are the score ranges you will find on most credit bureaus.

  • Between 1000 and 1200 is a close to perfect credit score. You will get reduced interest rates and improved loan terms with this score range. You likely have positive credit reporting with this score (payments on time for at least two years).
  • Between 800 and 999 is a very good credit score. You will be able to negotiate very competitive interest rates and loan terms.
  • Between 700 and 799 is a good credit score range that most people should aim for; expats should aim higher because they will be able to achieve more competitive rates for their home loans.
  • Between 500 and 699 is the average credit score range in Australia. Average credit scores mean you need to improve but also mean you don’t have any significant errors in your credit file.
  • Between 300 and 499 is a below-average score range. If you are an expat in this score range, you must make on-time payments and check your report for mistakes.
  • Between 0 and 299 is a bad credit score range. If you have a bad credit score, you likely have a limited credit history, so you need to build your credit by making payments on time and lowering your utilisation level.

What Is The Minimum Credit Score An Expat Needs To Get An Australian Mortgage?

There isn’t an absolute number for the minimum credit score and credit rating an expat needs to get an Australian mortgage/ home loan. Instead, each lender has its criteria that you need to meet to acquire a home loan. Generally, you should aim for a score over 700 to have an excellent chance of obtaining a home loan

However, some lenders don’t use credit scores to learn if they can trust an applicant to make repayments on time; they will refer to the credit application and the individual points of merit on it. For example, they will check your occupation and the income you get from it to check if it will sustain the loan.

What Credit Score Does An Expat Need to Get An Australian Mortgage?

Is It Possible For An Expat To Get An Australian Mortgage With Bad Credit Scores?

Believe it or not, it is possible to get an Australian mortgage if you’re an expat with bad credit.  It all depends on the lender you choose and the property. 

However, it can be challenging to find a lender that will provide a home loan for an expat with bad credit; most lenders won’t negotiate with them to give them a home loan. 

If you are an expat in Australia, you should consider hiring a mortgage broker to contact many lenders and broker a deal with one. Mortgage brokers can research many different lenders, including specialist lenders, to find the best terms for expat clients.

One element that is important to remember is that lenders will provide a higher interest rate for a home loan for an expat with bad credit because of the added risk.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

How Can An Expat Improve Their Credit Score And Credit Report To Get An Australian Mortgage?

Ideally, you need a higher credit score to gain the best interest rates and terms for a home loan if you’re an expat. 

If you have low credit, you need to build it up and improve it; here are some ways you can improve your credit score.

Build Credit History

The easiest way to build up your credit file and improve your credit history is to make payments on time. 

You need to get out of any negative repayment habits and make all payments exactly when you need to pay them.

The payment types can include credit card payments (tax payments, subscriptions, bills, etc.) and repayments on loans (home loans, personal loans, etc.). If you make home and personal loan payments on time over a long period, your credit score will increase.

Keep The Utilisation Level On Your Credit File Down

Your utilisation level is the amount of credit limit you use monthly; lenders can see your utilisation level on your credit file. If you overspend your credit limit, it can be a significant factor in a bad credit score.

Thankfully, there are ways to lower your utilisation level, including:

  • Budgeting and making sure you don’t overspend; you should only spend under a percentage of your credit limit (20%, for example).
  • If you find it too difficult not to spend too much, you can reduce your credit limit to prevent you from overspending. However, you still need to budget and lower your spending if you do this.

Report Errors On Your Credit Report

If errors or mistakes appear on credit reports, it can negatively affect your credit file and lower your credit score. Therefore, if you see any errors on the report, you must report them to increase your credit score.

What Credit Score Does An Expat Need to Get An Australian Mortgage

How Can An Expat Find A Loan That Links To Their Credit Score?

To find the best loan for you and your credit score, you need to find a lender that will accept you. However, you need to find your credit score before you do this. 

It is advisable to get your credit score calculated by one of the three major credit bureaus in Australia because they have excellent features and accurate credit scores. The major credit bureaus include Experian, Equifax and Illion. 

When you get your credit score calculated, the next step is to find a lender yourself or hire a mortgage broker. A mortgage broker can research lenders and find a deal that fits your credit score and credit history.

Get a free Australian mortgage assessment today.

Apply online to get a free recommendation with real rates and repayments.

The Ideal Credit Score For An Expat Looking For An Australian Mortgage

In conclusion, the ideal credit score for an expat looking for an Australian mortgage can vary depending on the lender. Generally, expats should aim for a credit score of over 700 to negotiate an excellent interest rate and home loan term with the lender.

If you’re an expat with a lower credit score, you can acquire a home loan depending on the lender. To find major banks and lenders that will work with you, you should hire a mortgage broker to help you find the best interest rates and terms. 

Alternatively, you could improve your credit score and credit history by making payments on time, lowering your utilisation level and checking for errors on your credit report.

What Credit Score Do You Need to Get An Australian Mortgage

Frequently Asked Questions

Can An Expat Get A Mortgage In Australia?

The short answer is yes. Expats can get a mortgage in Australia, and it doesn’t necessarily matter what their credit score is (ideally, expats should have a credit score of over 700).

You can get a home loan with lower credit if you’re an expat, depending on the lender. 

You should hire a mortgage broker to find lenders that will offer home loans to those with lower credit scores.

How Easy Is The Australian Mortgage Process For An Expat?

The Australian mortgage process can be relatively straightforward for an expat, but there are ways to make it easier. First, if you’re an expat, you should aim to have a high credit score before applying for a home loan (over 700).  Second, you should hire a mortgage broker to research, find lenders, and find the best deals and rates to make the process easier.

Can An Expat Use Foreign Income To Qualify For An Australian Mortgage?

If you’re an expat, you can use foreign income to qualify for an Australian Mortgage. To do so, you need reports of your foreign income on your previous tax returns (spanning back at least two years). If you meet the criteria, applying for a mortgage is easy.

What Is The Minimum Credit Score For Mortgage Options For An Expat In Australia?

There isn’t a definitive number for an expat’s minimum credit score and credit rating to get an Australian mortgage/ home loan. Instead, each lender has its own criteria that you need to meet to acquire a home loan.

Generally, you should aim for a score over 700 to have an excellent chance of negotiating brilliant rates for your home loan.

What Are The Best Ways For An Expat To Improve Their Credit Score?

The best ways for an expat to improve their credit score and credit history include:

  • Make payments and repayments on time (subscriptions, bills, etc.).
  • Lower your utilisation level by limiting the amount of your credit limit you spend each month.
  • Check for errors and incorrect information on your credit report and report them.
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