Buying guide

How Your Credit Score Can Impact Buying a House in New Zealand

What is a credit score, and why does it matter when you’re buying a house?

Last updated: 16 April 2025 | 5 min read

Thinking about buying your first home? You’ve probably started exploring deposits, KiwiSaver, and how much you might be able to borrow. But have you checked your credit score? Your credit rating can play a surprisingly big role in how much a bank is willing to lend—and on what terms.

This guide breaks it down for you.

What you’ll learn:

Why Your Credit Score Matters
What Is a Good or Bad Credit Score?
How to Check Your Credit Score in New Zealand
What Affects Your Credit Score?
Can You Get a Mortgage with a Bad Credit Score?
How to Improve Your Credit Score Before Buying a Home

Why Your Credit Score Matters

Your credit score is a snapshot of your financial behaviour—basically a trust rating used by lenders to assess whether you’re a safe bet. It gives them insight into how reliably you’ve paid back money in the past.

In New Zealand, your score will typically sit somewhere between 0 and 1,000, and it includes your history with things like:

Credit cards
Loans and overdrafts
Utility bills
Phone contracts
Mortgages (if you’ve had one)

When you apply for a home loan, lenders will look at your credit score alongside other factors like your income, expenses, savings, and any existing debt. A low credit score doesn’t always mean you’ll be turned down—but it could mean:

You’re offered a smaller loan amount
You’ll be charged higher interest rates
You’ll need to meet extra lending conditions

On the flip side, a strong credit score shows you’re reliable, making it easier to get that all-important pre-approval.

A good credit score matters most when you're seeking pre-approval for a home loan.

What Is a Good or Bad Credit Score?

While each lender has its own criteria, here’s a general guide:

Credit scores range from 0 - 1000
Score Range	What It Means
700–1000	700–1000	Excellent – you're in great shape to apply for a mortgage.	Excellent – you're in great shape to apply for a mortgage.
500–700	500–700	Average – you’ll probably be fine, as long as the other factors lenders look into appear okay.	Average – you’ll probably be fine, as long as the other factors lenders look into appear okay.
300–500	300–500	Below average – you may face higher interest rates or be offered a smaller loan.	Below average – you may face higher interest rates or be offered a smaller loan.
Below 300	Below 300	Poor – getting a home loan will be tough, but not impossible.	Poor – getting a home loan will be tough, but not impossible.

How to Check Your Credit Score in New Zealand

Luckily, checking your score is easy—and free. There are three main credit reporting agencies in NZ:

Centrix – Fast turnaround (next business day) if you have a NZ driver licence or passport.
Equifax – Use their My Credit File tool to get a report within 10 days.
illion – Offers instant access to your credit score via Credit Simple (requires sign-up).

What Affects Your Credit Score?

Your credit score is based on a range of factors, including:

Length of credit history – The longer (and cleaner) your record, the better.
Late or missed payments – Recent ones hurt your score the most.
Bankruptcy or insolvency – Major red flags that can drop your score significantly.
Credit applications – Applying for lots of loans or credit cards in a short time can be a red flag.
Frequent address changes – Staying put helps show stability, which lenders tend to like.

Remember, old mistakes won’t haunt you forever—credit scores improve over time if your behaviour improves.

It's easy to find our your credit score in NZ.

Can you get a home loan with a bad credit score?

It’s not the end of the road if your score isn’t ideal. Here are your options:

Talk to a mortgage broker – They can help you find lenders who work with buyers with poor credit. A broker will also guide you through improving your application.
Consider non-bank lenders – These lenders are more flexible, though they usually charge higher interest rates and fees.
Take time to improve your score – Sometimes, the best move is to pause your plans for 6–12 months and work on boosting your credit rating.

How to Improve Your Credit Score Before Buying a Home

Here are a few practical ways to boost your credit rating:

1. Avoid new credit applications

Hold off on applying for new loans or credit cards while you’re trying to improve your score.

2. Pay your bills on time

Set reminders or set up direct debits to avoid missing payments—it makes a big difference.

3. Pay off debts where possible

Clearing outstanding debts shows lenders you’re financially responsible and improves your debt-to-income ratio.

4. Lower your credit card balances

You don’t need to clear the full balance straight away, but reducing it helps show good credit use.

5. Maintain good accounts

If you’ve had an account (e.g. credit card or phone plan) for years with no issues, hang onto it. A long, positive history is great for your score.

Author

Hannah Hilliam

Hannah is a staff writer at Trade Me, contributing to Trade Me Property. Having bought, sold, and renovated homes herself, she knows first-hand how exciting — and overwhelming — the property journey can be. With a knack for making complex topics feel simple, Hannah focuses on sharing practical, down-to-earth advice to make daunting decisions feel a little less overwhelming.