A court judgment — also called a "writ" or "court-issued debt order" — is one of the more serious items that can appear on an Australian credit file. Unlike a default, which is between you and a creditor, a judgment means a court has formally ordered you to pay a debt.
Most major banks will decline an application the moment they see one. But the story doesn't end there. A growing number of specialist and non-bank lenders assess court judgments in context — and many people with judgments do successfully get home loans.
What Is a Court Judgment on a Credit File?
A court judgment is issued when a creditor takes legal action against you for an unpaid debt and wins. It can result from:
- Unpaid credit card debt referred to a debt collector who then pursues legal action
- Unpaid personal loans or car loans
- Unpaid business debts (if you were a sole trader)
- Disputes over leases, contracts, or services
Once entered, a judgment appears on your credit file and stays for 5 years. It is separate from — and in addition to — any defaults already on the file for the same debt.
How Lenders View Court Judgments
| Lender Type | Approach to Court Judgments |
|---|---|
| Big 4 banks (CBA, ANZ, NAB, Westpac) | Automatic decline in most cases |
| Second-tier banks (ING, Bankwest, Suncorp) | Generally decline; very limited exceptions |
| Non-bank lenders (Pepper, Liberty, Bluestone) | Case-by-case — paid judgments may be acceptable |
| Specialist / non-conforming lenders | Will consider with sufficient deposit and explanation |
Paid vs. unpaid judgments: Paying the judgment doesn't remove it from your file — but it does change how lenders read it. An unpaid judgment signals ongoing financial difficulty. A paid judgment with clear documentation shows the matter is resolved. Always pay it and get written confirmation.
What Specialist Lenders Look at Beyond the Judgment
When assessing a borrower with a court judgment, specialist lenders consider the full picture:
1. Age of the Judgment
A judgment that's 4 years old carries far less weight than one from 6 months ago. As the judgment ages toward the 5-year mark, more lenders become willing to consider the application.
2. Amount of the Judgment
A $3,500 judgment from an old phone contract is treated very differently to a $85,000 business debt judgment. Small amounts with clear explanations (e.g., a disputed landlord charge) are viewed more favourably.
3. Reason for the Judgment
Lenders want a written explanation. Common acceptable reasons include:
- Relationship breakdown / divorce (debt was a joint liability)
- Illness or job loss at the time (isolated event, not a pattern)
- Business failure (especially if followed by employment stability)
- Disputed debt that was eventually settled
4. What Has Happened Since
12–24 months of clean repayment history after a judgment carries significant weight. Lenders want to see that the judgment was an exception, not a pattern of financial behaviour.
5. Deposit Size
A larger deposit reduces lender risk. Most specialist lenders require at least 10–20% deposit when a court judgment is present — compared to 5% under standard lending.
Deposit Requirements with a Court Judgment
| Judgment Status | Age | Minimum Deposit Typically Required |
|---|---|---|
| Unpaid | Any | 20–30% (specialist only) |
| Paid | Under 1 year | 20% minimum |
| Paid | 1–3 years | 15–20% |
| Paid | 3–5 years | 10–15% |
| Any | Nearing 5 years (about to fall off) | Some banks at 10% |
The Rate Premium — What to Expect
Specialist lenders charge higher rates to reflect elevated risk. On a $600,000 loan:
| Scenario | Typical Rate | Monthly Repayment |
|---|---|---|
| Clean credit, major bank | 6.20% | ~$3,660 |
| Old paid judgment, non-bank | 7.20% | ~$4,085 |
| Recent unpaid judgment, specialist | 8.50%+ | ~$4,614 |
The rate premium is real — but it's not permanent. Once the judgment falls off at 5 years and you've built 12+ months of clean history with the new lender, refinancing to a lower rate is a straightforward process.
Steps to Take Before Applying
- Pay the judgment in full — get a letter of satisfaction from the creditor
- Pull your full credit report — verify the judgment is correctly recorded (amount, date, status)
- Write a brief explanation letter — one page covering what happened and how your situation has changed
- Build 6–12 months of clean history — on-time repayments on all current accounts
- See a mortgage broker — go to the right lender first time; every rejected application adds another enquiry to your file
Do not apply to multiple lenders yourself. Each application creates a hard enquiry. If three banks all decline you in the same month, your file looks worse than it did before — making specialist lenders more cautious too. A broker places your application once, with the right lender.
Frequently Asked Questions
5 years from the date it was entered, regardless of whether you pay it. After 5 years it falls off automatically. Paying it does not remove it earlier — but it updates the status from "unpaid" to "satisfied", which matters to lenders.
Only if it was entered incorrectly — wrong amount, wrong date, or you were not properly notified. Judgments that were correctly issued cannot be disputed through the credit bureau. You would need to apply to have the court order set aside, which requires legal advice.
Yes — significantly. A satisfied/paid judgment opens doors that an unpaid one keeps firmly closed. Most specialist lenders won't touch an unpaid judgment at any deposit size. Paying it is the single most important step you can take before applying.
Generally yes — a court judgment signals that a creditor pursued formal legal action, which is seen as more serious than a default alone. However, many judgments also have an associated default on the file. Lenders look at the combined picture.
Pepper Money, Liberty Financial, Bluestone Mortgages, La Trobe Financial, and Resimac are among the specialist lenders who assess applications with court judgments on a case-by-case basis. Each has different policy thresholds — which is why using a broker who knows their current credit policies is essential.