Links Property Finance · Worked example from a Sydney mortgage broker: What If One of Us Has a Credit Problem?

Lender attitudes to a small paid default vary far more than most borrowers expect. Mainstream lenders differ on age, size and whether it was paid, and some will look past a small, old, settled default entirely where the rest of the file is strong.

Specialist lenders will certainly look past it, at a price. The mistake is assuming the specialist path is the only one, and paying for it unnecessarily. Our credit history guide covers how the tiers work, and buying with a partner covers the joint-application questions.

Both credit files pulled and read properly first, because borrowers are frequently wrong about what is listed. The default's age, size and paid status, which together decide which tier of lender is realistic.

The solo borrowing range calculated, so the trade-off is a number rather than a fear. Whether waiting for the listing to drop off is realistic against the market, and what that wait costs.

And ownership structure if they do apply in one name, because the person on the loan and the people on the title are separate decisions with real consequences.

Mainly what applying in one name costs: the non-borrowing partner can usually still go on the title, but they own without the loan, and the borrowing partner carries the full liability and the assessment alone.

That is a legal and relationship conversation as much as a lending one, and it belongs with a solicitor before settlement, not after.

Where the default is recent, large or unpaid, the straight answer changes: paying it and waiting is often better than borrowing at specialist pricing, and a broker who will not say that is not being useful.

Do not decide before you have both numbers. Pull both credit files, get the joint and solo ranges priced against real lender policy, and then choose.

A small, old, paid default is a smaller obstacle than most people fear, and the expensive mistake is usually the assumption, not the default itself.