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Bad credit home loans Adelaide

A default doesn't mean no

Paid defaults, judgments, discharged bankruptcy, credit impairment. Most brokers stop at the credit file. We read the story behind it and find the lender whose policy fits.

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Last reviewed: August 2026
Home›Home Loans›Bad credit home loans
Understanding your credit file

What counts as bad credit

Credit impairment covers a wide range of situations. Some are serious, some are minor, and lenders treat each differently. Understanding what is on your file is the first step toward knowing what is possible.

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Paid defaults - A debt that was listed as a default but has since been paid in full. Many specialist lenders accept paid defaults, particularly once they are 12 or more months old. The dollar amount and number of defaults matter.
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Unpaid defaults - Defaults that remain outstanding. Fewer lenders will consider these, and those that do require a higher deposit and charge a larger rate premium. Paying them before applying significantly improves your options.
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Court judgments - A judgment is more serious than a default and typically requires specialist lending. Whether the judgment is satisfied or unsatisfied determines which lenders will look at your application.
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Part IX debt agreements - A formal arrangement under the Bankruptcy Act. Most mainstream lenders decline these, but specialist lenders will consider borrowers who have completed a Part IX agreement, particularly with clean conduct since.
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Discharged bankruptcy - Bankruptcy remains on your credit file for five years from discharge, but a growing number of lenders will consider applications from two years post discharge with clean credit since. LVR caps apply.
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Late payments - Comprehensive credit reporting means late payments of 14 days or more now appear on your file. A pattern of late payments can affect your score even without a formal default listing.
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Afterpay and BNPL defaults - Buy now, pay later services report defaults to credit bureaus. A small Afterpay default can have the same impact on your credit file as a much larger debt. These are increasingly common and lenders are becoming more nuanced in how they assess them.
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Multiple enquiries - Too many credit applications in a short period can reduce your score and signal risk to lenders. This is why working with a broker who lodges one targeted application matters.
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Our approach

How we assess your file

Most brokers see a default and stop. We start there. A credit file is a document, not a verdict. Lendology reads it properly, finds the right lender, and builds the submission that gets approved.

Read the credit file properly
The listing date and the payment date are not the same thing, and the difference can determine whether a lender will approve you. Dollar thresholds matter too. Some lenders disregard defaults under $500, others under $1,000. The assessor looks at the pattern, not just the number. Lendology reads your file through the lens of real lender policy so we know exactly where you stand before we lodge anything.
Find the right lender
Specialist and non-conforming lenders exist specifically for borrowers with credit impairment, but their policies vary enormously. One lender may accept two paid defaults under $5,000 at 80% LVR. Another may require 70% LVR for the same file. Some mainstream lenders also have more generous policies than you might expect for minor impairment. Lendology maps your credit file against actual lender criteria across our entire panel to find the best fit.
Build the submission
Every adverse credit application needs a letter of explanation. This is your opportunity to provide context, not excuses. The assessor wants to understand what happened, why it will not happen again, and what has changed. Lendology helps you write this properly and packages it with supporting evidence: bank statements showing clean conduct, payslips showing stable income, a clear savings pattern. The goal is a submission that gets past page one.
The plan

The two stage pathway

Most adverse credit home loans are not permanent. They are a bridge. The strategy is straightforward: get into the property now with a specialist lender, then refinance to a mainstream lender once your credit file cleans up.

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Stage one: specialist lender
You borrow through a specialist or non-conforming lender at a rate that is typically 1 to 3 percent above standard variable rates. You are buying the property, building equity and establishing a track record of clean repayment. The rate is higher, but you are paying your own mortgage instead of someone else's rent.
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Stage two: refinance to mainstream
Defaults drop off your credit file after five years from the listing date. Once your defaults age past the threshold that mainstream lenders require, typically two to three years of clean credit, you refinance to a standard rate. Lendology tracks this timeline from day one and contacts you when the window opens.
The cost comparison
Paying a rate premium is almost always cheaper than continuing to rent while you wait for your credit file to clean up.
Consider a $500,000 loan at 8.5% versus a mainstream rate of 6.5%. The difference in monthly repayments is roughly $650. But if you are paying $2,200 a month in rent while you wait two to three years for your file to improve, you are spending $52,800 to $79,200 in rent with nothing to show for it. The rate premium on the specialist loan costs less and you are building equity the entire time.
~$650
/month rate premium
$0
equity built while renting
Real situations

Common situations we help with

Credit impairment rarely happens in isolation. There is usually a life event behind it. Lendology understands that context matters and works with lenders who assess the full picture.

Business owners
Paid defaults from a business failure
A business wound down, trade debts defaulted, and the director was left with listings on their personal credit file. Now back in PAYG employment with stable income, rebuilding savings, and ready to buy. This is one of the most common adverse credit scenarios we see, and specialist lenders understand it well. The key is demonstrating that the business debts are resolved and your personal financial position is now stable.
Minor defaults
A single telco or utility default
A phone bill or electricity account that went to collections over a small amount, often during a house move or a period where mail went astray. Paid quickly once discovered. Many mainstream lenders will actually accept a single small paid default after 12 to 24 months, particularly if the rest of your credit conduct is clean. You may not even need a specialist lender. Lendology checks mainstream policy first.
Bankruptcy
Discharged bankruptcy
Two or more years discharged from bankruptcy with clean credit conduct since. A growing number of specialist lenders will consider these applications, typically capping the loan at 70 to 80 percent LVR with a rate premium. The discharge certificate, evidence of savings and clean bank statements form the core of the submission. Home ownership after bankruptcy is genuinely achievable with the right approach.
Separation
Credit impairment from separation
Joint debts that fell behind during a separation when one party stopped contributing. Mortgage arrears, missed credit card payments, or defaults on joint accounts. One party is now rebuilding independently with their own income and wants to buy a home. This is deeply personal territory and Lendology handles it with care. Specialist lenders assess the circumstances around the impairment, not just the listing itself.
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Common questions

FAQs about bad credit home loans

Can I get a home loan with defaults on my credit file?
Yes. Many specialist and non-conforming lenders approve home loans for borrowers with paid defaults. The key factors are the age of the default, the dollar amount, whether it is paid or unpaid, and how your credit conduct has been since. Some mainstream lenders also accept minor paid defaults after 12 to 24 months. Lendology assesses your file against real lender policies to identify the best option available to you right now.
How long do defaults stay on my credit file?
Defaults remain on your credit file for five years from the date they are listed. Paid defaults still show but are treated more favourably by lenders than unpaid defaults. Once a default ages past certain thresholds, more lenders become available and the rates improve. Lendology tracks these timelines so you know exactly when new options open up.
Will I pay a higher interest rate with adverse credit?
Usually yes, at least initially. Specialist lenders charge a premium to reflect the additional risk, typically between 1 and 3 percent above standard variable rates depending on the severity of the impairment. The important thing to understand is that this premium is temporary. Once your credit file improves, usually within two to three years, Lendology refinances you to a mainstream lender at a standard rate. The premium is the cost of getting into the property now rather than waiting.
Can I get a home loan after bankruptcy?
Yes. A growing number of lenders will consider borrowers who have been discharged from bankruptcy for at least two years, provided there has been clean credit conduct since discharge. LVR caps typically apply at 70 to 80 percent, and a rate premium will apply. The application requires a discharge certificate, evidence of savings, and a clear letter of explanation. Lendology has helped clients into home ownership after bankruptcy and understands the process thoroughly.
What deposit do I need for a bad credit home loan?
Most specialist lenders require a minimum 10 to 20 percent deposit for borrowers with credit impairment. The exact requirement depends on the nature and severity of the impairment and the individual lender's policy. A larger deposit improves your options, reduces the interest rate, and makes approval more likely. Genuine savings held for three months or more strengthens your application further.
Do I need to explain my defaults to the lender?
Yes. A letter of explanation is a standard part of any adverse credit application. This is your opportunity to provide context for what happened, why it will not happen again, and what has changed since. Lendology helps you write this properly. We focus on the facts: what the circumstances were, how they have been resolved, and what your financial position looks like now. The letter is supported by evidence including clean bank statements, payslips and a savings track record.
Related services

You might also be interested in

Refinancing
Once your credit file improves, refinancing to a mainstream lender at a standard rate is the natural next step. Lendology tracks the timeline and contacts you when the window opens.
Learn more →
Low doc / alt doc loans
If you are self-employed with adverse credit, you may need a lender that handles both non-conforming credit and alternative income verification. Lendology knows which lenders do both.
Learn more →
Separation finance
If your credit impairment arose from a separation, Lendology specialises in helping people rebuild independently. We understand how joint debts affect your position and which lenders assess the context.
Learn more →
Your credit file is not the whole story
Talk to a boutique brokerage that reads past the defaults and finds the lender whose policy fits your situation. No cost. No judgment. Just honest advice.
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