Refinancing with Bad Credit: What Aussie Homeowners Need to Know

Wiki Article

Thinking about how to refinance my home with bad credit can be a bit stressful, especially if you’re not sure where to begin. But don’t worry—you’re definitely not alone, and there are still options available for Aussie homeowners in this boat. Let’s walk through what you should know if your credit score is holding you back.

Life happens—missed payments, unexpected bills, or even job changes can cause a few bumps in your credit history. But the good news is, having bad credit doesn’t mean you can’t refinance. It might be a bit trickier, and you may not get the lowest interest rates, but it’s still possible.

First, it’s a smart move to check your credit report. You can do this for free once a year through credit reporting bodies in Australia like Equifax, illion, or Experian. Look for any mistakes that might be pulling your score down—like debt you’ve actually paid off or accounts that don’t belong to you. Fixing errors could bump up your credit rating, which helps improve your chances.

Next, get a clear picture of your current loan and how much equity you have in your home. Lenders often see borrowers with more equity as less risky, so if your property has gone up in value, that can work in your favour.

Also, make sure your current repayment history is looking solid. Even if your past credit isn’t great, showing that you’ve been sticking to your mortgage and paying bills on time can help show lenders that you’re working hard to stay on top of things now.

If your bank isn’t keen to help, you can speak to a mortgage broker. They deal with a range of lenders—including some that are open to working with folks who’ve had credit troubles.

Keep in mind though, some loans for bad credit might come with higher fees or interest rates. So it’s important to weigh up the long-term cost. Still, refinancing could give you a chance to better manage your repayments or even switch from a variable to fixed rate.

At the end of the day, the key is to know what’s on your credit report, stay on top of your current loan, and ask for help if you need it. Refinancing with bad credit might take a bit more effort, but for many Australians, it can be a step in the right direction.