No, you can’t avoid a credit check when applying for a home loan. Every lender does a credit check on all home loan applications. 

What Happened to No Credit Check Home Loans?

In the past, there were home loans without a credit check, but things changed with the introduction of the Uniform Consumer Credit Code (UCCC). As credit reporting improved in Australia, lenders started using it more, and the National Consumer Credit Protection Act (NCCP) made it a rule to have a credit check for home loans. 

What Can You Do if Every Lender Does a Credit Check?

Even though every lender checks your credit, you can still find good deals with a bad credit home loan. Some lenders may lend up to 90% of the property value, even with bad credit history like discharged bankruptcy, defaults, or missed repayments. 

Qualifying Criteria for Bad Credit Home Loans Specialist lenders can consider bad credit, depending on the type and amount of the bad credit. For example: 

• One small paid default: Up to 95% of property value. 
• Multiple small paid defaults: Up to 95% of property value. 
• Moderate paid defaults: Up to 90% of property value. 
• Large paid defaults: Up to 90% of property value. 
• Unpaid default: Up to 95% of property value. 
• Judgments/Court writs: Up to 90% of property value. 
• Part IX debt agreement: Up to 90% of property value. 
• Discharged bankruptcy: Up to 95% of property value. 

Wait for Your Credit to Clear for a Better Deal

While you can’t get a home loan without a credit check, you can improve your credit score and get a better deal by avoiding more negative listings. You can remove disputable listings through credit repair. 

The Power of Your Deposit

A strong deposit can help you get a good deal on a bad credit home loan. Lenders usually require at least 10% of the purchase price as a deposit, including 5% in genuine savings. 

Costs Involved When Buying Property

When buying property, you might spend up to 5% of the purchase price on government fees and other costs like conveyancing, inspections, loan fees, and Lenders Mortgage Insurance (LMI). 

Why Do Lenders Perform a Credit Check?

Lenders use credit checks to assess the risk of borrowers. Credit checks are required by the National Consumer Credit Protection (NCCP) act, ensuring responsible lending. 

No Credit Check Home Loans FAQs 

Can I get pre-approved for a home loan with no credit check? 

• It’s better to get pre-approved with a full credit assessment for reliability. 

Are there interest rate discounts with bad credit home loans? 

• Major banks offer better interest rates; non-bank lenders might also provide lower rates. 

When should I refinance my bad credit home loan? 

• Refinance when you meet standard bank criteria: 80% LVR or less, paid defaults, proven income, and perfect repayments for 6 months.