If your credit file has a few marks on it, you're not alone and you're not locked out of home ownership. Many people have a missed payment, an old phone bill default or too many enquiries. The key is understanding what's on your file and taking the right steps before you apply.
Step 1: Get your reports
Get free copies from all three credit bureaus:
- Equifax
- Experian
- illion
Each may show different information. Check them all.
Step 2: Look for errors
Common errors include:
- Accounts that aren't yours
- Defaults that were paid but not updated
- Duplicate listings
- Incorrect dates or amounts
You can ask the bureau or credit provider to correct errors for free. You don't need to pay a "credit repair" company to do this.
Step 3: Deal with defaults
A default is listed when a debt over $150 is 60+ days overdue and the creditor has followed the notice rules. Defaults stay for five years, even when paid.
What to do: - Pay it. A paid default looks far better to lenders than an unpaid one. - Ask for removal if the default was listed incorrectly, for example if you weren't properly notified. - Keep evidence of payment.
Step 4: Stop applying for credit
Every application leaves an enquiry for five years. Lots of enquiries in a short time look like credit hunger. Hold off on new cards, loans, phone plans on credit and BNPL until after you've got your home loan.
Step 5: Build positive history
Under comprehensive credit reporting, on-time payments are recorded. Over 12 to 24 months, a clean run of payments improves how lenders see you.
- Set up direct debits for all bills and repayments
- Keep one credit card with a modest limit and pay it in full
- Don't miss even small payments
Step 6: Reduce your debt
Lower credit limits, paid-off personal loans and closed BNPL accounts improve both your credit profile and borrowing power.
How long does it take?
- Errors can be fixed in weeks
- Enquiries lose impact over months
- Repayment history improves over 12 to 24 months
- Defaults drop off after five years
Can you get a loan with bad credit now?
Yes, through specialist lenders, usually at higher rates. Once you've built a good repayment history (often 12 to 24 months), you can refinance to a mainstream lender at a lower rate. See our existing guide to bad credit home loans.
Watch out for credit repair scams
Some companies charge large fees for things you can do yourself, or promise to remove accurate information, which they can't do. Free help is available from the National Debt Helpline (1800 007 007).
Frequently asked questions
Will paying a default remove it?
No, but it'll show as paid, which lenders view more favourably.
How many enquiries is too many?
There's no fixed number, but several in a few months raises flags.
Can a broker see my credit file?
With your consent, yes. We can review it before any application.
Want help reviewing your credit file before you apply? Call Finfident on 0424 545 654.
This article is general information only and doesn't take into account your objectives, financial situation or needs. Figures, rates and scheme rules are current as at October 2026 and can change. Finfident Finance Brokers (ABN 94 679 280 801) is Credit Representative 569374 of Outsource Financial Pty Ltd (ACN 131 090 705), Australian Credit Licence 384324.