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Finance Tips 6 min read

What lenders actually look at

Income and deposit are only part of it. Here is the wider picture a credit assessor works through.

Applicants often assume a loan decision comes down to income and deposit. Those matter, but a credit assessment covers considerably more ground.

Serviceability

Lenders test whether you could still meet repayments if rates rose, by assessing at a buffered rate above the actual interest rate. That buffer is the single biggest reason a borrowing estimate differs from what a lender will actually approve.

Living expenses

Declared expenses are compared against benchmark figures and, often, against your actual statements. Understating them rarely helps — it usually just delays the assessment.

Existing commitments

Credit card limits are generally assessed on the limit, not the balance. An unused card with a high limit can reduce borrowing capacity meaningfully.

Credit history

Repayment history information, defaults and the pattern of recent applications all form part of the picture.