Getting a home loan with a bad credit rating isn’t impossible – in fact, with LFG Loans, it’s easier than you think.

If you’ve got a bad credit rating or have had credit issues in the past, you know how difficult it can be to deal with a traditional lender. If you don’t fit into their narrow lending criteria, then it can be a challenge to get approval…and even if you do, the loan’s interest rate can be prohibitively high. Indeed, the penalties for having  a less than perfect credit rating are high when dealing with traditional banks and lenders.

That’s why we don’t deal with traditional lenders – we work with lenders who are;

  • prepared to be flexible
  • look past the raw numbers
  • work hard to understand your situation before making any decisions

We understand that real life doesn’t usually translate into a perfect credit rating. Both LFG Loans and our lenders agree – your situation may not be typical, but that doesn’t mean that you shouldn’t be able to get finance.

This is what you get when you work with LFG Loans:

Save on interest with an offset sub-accounttick
Gifted depositstick
Deposits as low as 5% accepted (on some loans)tick
Get access to redraw facilitiestick
Competitive interest rates, matched to your circumstancestick

We’ve helped hundreds of people with bad credit throughout Perth & WA afford the house of their dreams, and we can help you too.

To find out if you qualify for a bad credit mortgage, request a call-back at a time that suits you.

couple meeting to talk about bad credit home loan options

Further Info on Bad Credit Home Loans

What Qualifies As “Bad Credit”

Impaired credit comes in many different forms, from being behind on your mortgage, unpaid bills/taxes, bankruptcy or defaults, or just being over-committed relative to your income. Even applying for credit too often can impact your credit score, particularly if the credit applied for were credit cards. All of these things negatively affect your credit score, also known as your Equifax Score (previously VedaScore).

What’s considered a good score?

  • Excellent: Any score above 700
  • Good: Any score from 600 to 700
  • Average: 550 is the average score
  • Bad: Any score from 400 to 500
  • Very bad: Any score below 400

People with poor credit come in all shapes and sizes, and more often than not it’s the more affluent people who fall under this category, as they are generally more highly leveraged with debt. You can order a report of your credit score by going to Equifax here.

How Non-Traditional Lenders Work

Non-traditional lenders, also known as non-conforming lenders, are far more flexible than conventional lenders such as banks. These lenders (such as the ones that we deal with) review mortgage applications on a case-by-case basis, or “beyond the numbers” so to speak, to look at what went wrong in your credit history and to assess how risky lending money to you would be. If your credit score infractions are minor, and/or you are borrowing less than 80% of the property value, then you will likely be approved. To offset the risk of lending money to those with impaired credit, non-traditional lenders typically have higher interest rates and more stringent requirements.

Improving Your Credit Rating

There are a number of steps you can take to improve your credit score calculation before applying for a loan, such as paying your bills on time and avoiding applying for credit too often. If you have never borrowed money before, start with a small limit credit card and accumulate a history of making re-payments.

To find out if you qualify for a bad credit mortgage, request a call-back at a time that suits you.

FAQs

I’m a first home buyer, do I qualify for a bad credit home loan?

Yes, all other things being equal, your status as a first home buyer won’t make a difference. As you don’t have an established history of paying off a home loan, you would ideally have established a credit history with other forms of credit, such as credit cards or personal loans.

I’m applying for a home loan with my partner, who has bad credit. Will this affect our application?

If you’re applying together, then you’ll both be evaluated as a whole, so yes your partner’s bad credit score will indeed affect your application. Having a good credit score yourself will of course partially offset this.

Can I be guaranteed approval for a bad credit home loan?

Bad credit loan applications are made on a case-by-case basis, so you won’t find any lenders that provide “guaranteed approval” for bad credit loans.

Can pensioners qualify for bad credit home loans?

Lenders will generally accept a pension as a source of income, but you’ll need another source to be able to make a home loan’s repayments.

To find out if you qualify for a bad credit mortgage, request a call-back at a time that suits you.