Thinking about buying a home in 2025? Before you start house hunting, there’s one important number you should be paying close attention to—your credit score.

This three-digit number can make a big difference when it comes to getting approved for a mortgage, how much you can borrow, and even the interest rate you're offered. Here’s what you need to know about credit scores and how they impact your home loan journey.

What is a Credit Score?

• Excellent: 800+
• Very Good: 700–799
• Good: 600–699
• Average: 500–599
• Below Average: <500

How Credit Scores Affect Your Home Loan

1. Approval Odds
   Lenders want to see a history of responsible borrowing. A higher credit score makes it easier to get approved for a mortgage. If your score is low, some lenders may decline your application or require a guarantor.
2. Interest Rates
   Some lenders offer better interest rates to borrowers with strong credit. Even a 0.25% difference in rate can add up to thousands of dollars over the life of your loan.
3. Loan Amounts
   A better credit score may increase your borrowing capacity, as it gives lenders confidence in your ability to manage higher repayments.
4. Loan Features
   A good credit score can also open up access to loans with more flexibility—like offset accounts, interest-only periods, or the ability to borrow with a smaller deposit.

What Affects Your Credit Score?

How to Improve Your Credit Score Before Applying

• Check your credit report – You’re entitled to one free copy a year from each credit bureau.
• Clear any defaults – If you’ve had issues in the past, consider repaying overdue debts.
• Reduce credit card limits – Even if you don’t use them, high limits can reduce your borrowing power.
• Avoid unnecessary credit applications – Too many ‘hard checks’ can lower your score.

Talk to a Broker Who Understands