What Credit Score Do I Need for a Personal Loan?
Most Australian personal loan lenders prefer a credit score of 600 or higher, though specialist options exist for lower scores depending on your overall income and ABN history.
What credit score is required for a personal loan?
In Australia, there is no single universal minimum score, but most mainstream personal loan lenders look for a credit score of 600 or above on reporting bureaus like Equifax. A score above 720 typically unlocks prime comparison rates, while scores between 500 and 600 fall into mid-tier or specialist lending criteria.
For sole traders and company directors, personal credit files carry substantial weight during loan underwriting. Most Australian personal loan providers use risk-based pricing, meaning a higher score translates directly to lower interest rates, reduced fees, and higher total approval amounts.
Beyond your credit score, lenders assess broader serviceability metrics, including bank statement conduct, existing debts, and ATO liabilities. Having a lower score does not mean immediate rejection, provided your recent income and cash flow demonstrate clear capacity to handle the repayments.
Applying with the wrong lender can result in hard inquiries that further lower your score. A Lonix broker can compare lenders across Australia and structure the loan to match your unique credit profile, ensuring you present a compelling case to the right credit provider.
Related questions
- How does applying for a personal loan affect my credit score?
- Submitting a formal loan application triggers a hard credit inquiry, which temporarily drops your credit score slightly. Submitting multiple applications within a short timeframe can signal financial distress and cause a larger drop.
- Can I get a personal loan with a bad credit score as a sole trader?
- Yes, specialist Australian lenders offer options for borrowers with lower credit scores by placing greater emphasis on recent bank statement conduct and cash flow. These products usually carry higher interest rates to account for the increased lender risk.
- How long do defaults remain on an Australian credit file?
- Payment defaults generally remain on your credit file for five years, while clear signs of serious credit infringement can stay for up to seven years. Paid defaults are viewed much more favourably during credit assessment than outstanding unpaid debts.
- What is the difference between a personal loan and a business loan for ABN holders?
- Personal loans are assessed primarily on your personal credit file and individual income for non-commercial use. Business loans evaluate business revenue, ABN registration length, and trading performance, often requiring low doc declarations or financial statements.