Low credit score: What are the options?


Getting turned down for a home loan because of a low credit score can be disheartening. However, it doesn’t mean it’s the end of the road. The good news is it’s still possible to achieve the dream of owning a home. In this article, we explore the options available.  

What is a credit score? 

A credit score is derived from your previous borrowing history. 

If you miss a loan repayment, have moved money between several credit cards, or have applied for lots of credit over a short period, you may have a poor credit score. 

Your credit score can be anywhere between 0-1000. Generally, anything below 500 is considered a low credit score. 

The score is important because it’s how lenders assess risk. A low credit score will make it more difficult to get a first home loan. 

How do I find out my credit score? 

You can check credit scores for free through the following websites: 


What steps can I take to improve my credit score? 

Your credit score can change over time. And the number one way to improve your score is to make regular repayments and on time. There are plenty of online budgeting tools that will help you prioritise and get on top of your spending. 

Another possibility is to take out a debt consolidation loan. Rather than having several smaller loans, all your debts are consolidated into one loan, often with a lower interest rate. One loan rather than many is easier to manage and usually means you will be debt-free more quickly. 


Can I still get a home loan with a low credit score?

It may be more difficult to get a home loan, but it's not impossible. 

Loan Market’s expert team of advisers can help. With over 20 lenders, our advisers have access to the largest panel of lenders in New Zealand. Depending on the individual’s circumstances, some lenders will consider borrowers with a low credit score. Using our expert knowledge, we shop around on the customer’s behalf to get the best deal possible.  Plus, we handle all the paperwork, saving valuable time and hassle. 

Another possibility is non-bank lenders. These financial institutions are often more flexible than mainstream banks. They tend to specialise in helping people who the bank has turned down. 

However, these lenders can offer higher interest rates to compensate for the increased risk. It’s important to note that with an improved history of good repayments, your credit score will increase over time. It’s then possible to refinance and get a better deal once your credit score has gone up. 


Loan Market: Expert help and advice 

The knowledgeable team at Loan Market is here to help. Even if you have a low credit score, our expert adviser team can help you get back on track.