Your credit score is one factor lenders consider when assessing your home loan application. Understanding what it means and how to improve it can help you secure better loan options.
What is a Credit Score?
Your credit score (0-1000 or 0-1200 depending on the agency) reflects your credit history and behaviour. It's based on factors like repayment history, credit inquiries, and existing debts.
Credit Score Ranges
| Score Range | Rating | Impact on Home Loans |
|---|---|---|
| 800+ | Excellent | Best rates and products available |
| 700-799 | Very Good | Competitive options from most lenders |
| 500-699 | Average | Standard products, some limitations |
| Below 500 | Below Average | May need specialist lenders, higher rates |
Improving Your Credit Score
- Pay all bills on time
- Reduce existing debt levels
- Limit credit applications (each inquiry affects score)
- Check your credit report for errors
- Keep old accounts open (shows history)