Home loan for poor credit: You may be eligible

Your credit history may show information you’d rather forget, but this doesn’t automatically mean you’re ineligible for a loan. There are options.  Applying with poor credit means talking to a lender that looks at more than just your credit history – Like Pepper Money. 

A Pepper Money loan may work if you have a credit score affected in the following areas: 

  • Overdue debts or defaults from the past five years

  • Bankruptcy declarations from the last five years

  • Late payments on your utility bills, like your electricity, gas or mobile phone bills

  • Recent applications for different loans or lines of credit

  • Any court writs or judgements against you

In the current environment, some of our regular home loan options may not be available. If you’re thinking of buying a house, then talk to us so we can understand your situation and see if we can help.

What is my credit score?

Your credit score is a number calculated by a company called a Credit Reporting Body (CRB) and it’s based on an analysis of the credit file they create about you. It is a file containing the collection of credit-related data they gather about you and your financial history. It is reported as a history and summarised as an overall total score. Your score may be used by some lenders to decide whether to lend you money, how much they will lend you and what interest rate will be offered to you.

Your credit score is rated on a five-point scale (excellent, very good, good, average and below average). It is the position of your score on this scale that helps lenders work out how risky it is for them to lend to you:

Excellent - you are highly unlikely to have any adverse events – like defaults or arrears – harming your credit score in the next 12 months

Very good - you are unlikely to have an adverse event in the next 12 months

Good - you are less likely to experience an adverse event on your credit report in the next year

Average - you are likely to experience an adverse event in the next year

Below average - you are more likely to have an adverse event being listed on your credit report in the next year

The good news is that while traditional lenders may not provide options for applicants with lower credit scores, Pepper Money may be able to help. We have a range of home loan products including one specifically designed to help if you have previous credit history issues.

What do you look at to see if a home loan for poor credit is suitable?

In your application, we will look at a range of information to determine if your application is suitable. While we do still consider your credit history, we understand that there may be other important factors that have affected your financial circumstances in the past. These may include:

  • Temporary illness that affected your ability to earn an income.
  • Your small business had some issues that affected your personal finances.
  •  A divorce left you with some unexpected changes to your financial situation.
  • You lost track of some of your bills.
  • Another lender declined your loan application.

We completely understand that real life issues like these may have got in the way in your past, and don’t necessarily impact your ability to service a loan today.

How can Pepper Money help me?

A bad credit history doesn't mean you're history

We understand that things are not always black and white and there may have been circumstances beyond your control that resulted in late payments, a default or you’ve recently been discharged from bankruptcy. Real life happens. That’s why we sit down with you for a one-on-one chat to learn more about your story. The more we know about you and your situation, the better we are equipped to find a solution.

Our decision is not only about your credit history, good or bad. There’s a whole bunch of other things we look at as well. Instead of simply ticking boxes, like most, we like to get a bigger picture of you. And we won’t make any new notes on your credit file without your okay.

To paint the big picture, we begin with 4 things and fill in details around them the more we talk with you.

desk items

  • What you do – how you make a living, full-time, part-time, casual, or run your own business
  • What you own – your assets, do you own a home or investment property or have you saved a deposit?

Liabilities, Expenses and Credit History

  • What are your outgoings? – your liabilities, do you have a mortgage, car payments or credit card debt? Do you have a business debt or ATO debt? What are your living expenses?
  • What you missed – your credit history, do you have any defaults, missed loan repayments or missed bills?

Even if any of these things are complicated in any way, we’ll do our best to help. Call us today. 

Credit Score Calculation

Things to remember

Helping you get sorted when you have a poor credit loan application does not mean we are any less thorough. We always complete a comprehensive assessment of each application. Each application must satisfy our normal credit assessment, and, importantly, it must be proven that it will genuinely meet your needs.


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Here are some handy tips and guides to help you get started with a home loan with a low credit score.

For more of your questions answered visit our Help Centre.

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