Does HECS Debt Affect Your Credit Score?

Many people with a student loan ask whether their HECS debt affects their credit score. It is a fair question, because a HECS-HELP balance can run into tens of thousands of dollars, and that sounds like the kind of debt that would show up when you apply for a home loan.

The short answer is that HECS debt generally does not affect your credit score, but it can still affect your home loan. The difference is between your credit report, which records your history with credit providers, and the lender’s assessment of your income and expenses.

How much it matters depends on your income, your HELP balance, how close you are to paying it off, the other debts you hold and how each lender treats study loan repayments.

This guide explains how Australian lenders may assess HECS debt and your credit score, based on lender policy wording we reviewed in October 2026.

Does HECS debt affect your credit score?

Generally, no. HECS-HELP and other study and training loans are managed by the Australian Taxation Office (ATO) through the tax system. They are not credit products from a bank or other credit provider, and they are not among the types of information that Moneysmart lists as appearing on a credit report.

Your credit score is calculated from what is in your credit report. Moneysmart explains that a credit report includes credit products you have held, repayment history, credit applications, defaults and court or insolvency records.

Credit report contents: Moneysmart, “Credit scores and credit reports” (moneysmart.gov.au, last updated 9 September 2026, checked 21 October 2026).

So a HELP balance on its own is generally not what moves your score. What lenders do with it during a home loan assessment is a separate question.

Related research: HECS Debt and Home Loans: How Australian Lenders Assess Student Debt

What is the difference between your credit score and your borrowing power?

• Credit score: a number calculated by a credit reporting body, such as Equifax or Experian, from your credit report. It reflects how you have managed credit.
• Borrowing power: how much a lender is prepared to lend after looking at your income, expenses, debts and its servicing rules.

HECS debt rarely affects the first, but it can affect the second, because compulsory repayments reduce the income you have available to repay a home loan.

Why lenders still look at HECS debt

• Repayments come out of your pay. Once your income is above the repayment threshold, your employer withholds extra tax to cover compulsory repayments.
• It reduces take-home pay. Lenders assess what you have left after tax and other deductions.
• It shows on payslips and tax records. Lenders may see HELP repayments on payslips, notices of assessment or an ATO portal printout.
• Lenders must verify debts. Lenders generally ask about all debts, including study loans, even if they are not on your credit report.

How do lender policies differ on HECS debt?

We reviewed policy summaries for 40 Australian lenders (a mix of banks and non-banks) from a third-party broker policy tool, as at October 2026. This is a research sample of 40 lenders, not the whole market.

18 of the 40 lenders in our sample have their own wording on HECS-HELP debt in the policy data we reviewed. None of the credit scoring wording in our sample mentions HECS or HELP. The differences are in how repayments are counted:

• Gateway includes study and training loan repayments as commitments, calculated using the ATO repayment rates.
• Macquarie treats HELP repayments visible on payslips as an involuntary expense, which can be excluded if there is evidence the debt has been paid out in full.
• ING uses the higher of the declared repayment or the compulsory ATO rate. Its wording says an application may still be approved where a servicing shortfall is caused only by the HELP repayment, if the balance is no more than $15,000 and there is extra evidence of capacity to repay, such as savings.
• Athena says the debt does not need to be included where it will be repaid within 12 months at the current repayment level, with an ATO portal printout no older than 30 days.
• Thinktank treats the debt as an expense but may waive this by exception if it is likely to be repaid within 12 months.
• NAB captures the debt and the repayment. Where the declared limit is $20,000 or less and servicing is not met, its wording describes a request to exclude the repayment with ATO portal evidence. Applicants still studying are not eligible for this.

For debt-to-income (DTI) limits, 6 of the 40 (ANZ, Bank Australia, Gateway, ING, Newcastle Permanent and UBank) say HECS-HELP is excluded from their DTI calculation.

These are examples of how differently lenders approach the same situation. These examples are not recommendations, and policy must be confirmed before an application is lodged. Policies change often, so confirm the current position with a broker before you apply.

Policy summary as at October 2026, from a third-party broker policy tool (export dated 20 October 2026). The lender guides behind it are dated between April 2026 and October 2026 for the lenders named on this page. The sample counts on this page cover all 40 lenders, whose guides are dated between October 2025 and October 2026. For example, ING's guide is dated 12 June 2026. Lender policies change often and may have changed since.

How much are compulsory HECS-HELP repayments?

Compulsory repayments depend on your repayment income. From 2025–26 the ATO uses a marginal system, so repayments apply only to income above the threshold. For 2026–27 the ATO lists:

For example, on repayment income of $90,000, the compulsory repayment would be about $3,071 a year, or roughly $256 a month: 15c for each dollar of the $20,472 above the threshold.

Repayment rates: ATO, “Study and training loan minimum repayment income and rates” (ato.gov.au, last updated 13 October 2026, checked 21 October 2026). Rates are indexed each year.

Does paying off HECS improve your credit score?

Generally not, because the HELP debt is not on your credit report in the first place. Paying it off may help your borrowing power, because the compulsory repayment stops. Some lenders may also exclude the repayment if the balance is about to be cleared, as the examples above show.

Before paying a large lump sum, it is worth weighing it against your deposit. Money used to clear HECS is money not available for the deposit, costs or a buffer, and a smaller deposit can matter more to some applications than the repayment saved.

What does affect your credit score?

Moneysmart lists the types of information that can be in your report. Examples that can matter include:

• the credit products you hold, such as credit cards, personal loans and buy now pay later accounts
• your repayment history, including missed payments
• the number of credit applications you have made
• defaults, such as unpaid utility or phone bills
• bankruptcies, debt agreements and court judgments
• hardship arrangements, which can be noted for the months they apply

Related research: Do Credit Card Limits Affect Your Home Loan Borrowing Power?

Do lenders have minimum credit scores?

Some do, for some products. Examples from our sample:

• OwnHome lists a minimum credit score of 750 for single applicants.
• Suncorp Bank lists a minimum Equifax score of 838 for loans eligible for its SunLight application process.
• St.George and Westpac list a minimum credit bureau score of 650 for self-employed applicants assessed using a one-year assessment method.
• Athena lists a minimum borrower credit score of 600 where the LVR is 80% or less.
• Thinktank treats applications as unacceptable where any borrower has an Equifax score below 500.

These are thresholds within specific products. A score above a minimum does not mean an application will be approved.

Can HECS debt stop you getting a home loan?

It can reduce how much you can borrow, and in a tight application it can be the difference between passing and failing servicing. It is rarely the only factor. Income, other debts, credit card limits, living expenses and the deposit all count.

Related research: Can You Get a Home Loan with ATO Tax Debt?

Does HECS affect car loans or personal loans?

The same logic generally applies. HECS is unlikely to affect the credit score a car or personal loan lender sees, but the lender may still count the compulsory repayment when it works out what you can afford. How it is treated depends on the lender and the product.

What documents might a lender ask for?

• recent payslips showing any HELP withholding
• your latest notice of assessment or tax return
• an ATO portal printout showing your HELP balance, especially if you want a lender to consider excluding it
• evidence of savings if the balance is small and could be cleared
• details of any other study and training loans, such as VET Student Loans

10 common mistakes with HECS debt and home loans

1. Assuming HECS is on your credit report and worrying about the wrong thing.
2. Leaving HECS off the application because it is not on your credit file.
3. Not checking your current balance on the ATO portal.
4. Using an old repayment rate instead of the current year’s rates.
5. Paying off HECS with deposit money without checking the effect on the deposit.
6. Ignoring credit card limits, which can matter more than HECS.
7. Applying with several lenders at once and adding credit enquiries.
8. Forgetting about other study loans, such as VET Student Loans.
9. Assuming every lender treats a small balance the same way.
10. Not having an ATO printout ready if a lender may exclude a small balance.

How to improve your chances before applying

• Get an ATO portal printout of your current HELP balance.
• Check your credit report with Equifax and Experian and fix any errors.
• Reduce or close credit cards you do not use.
• Keep your repayment history clean in the months before applying.
• Ask how different lenders treat HELP repayments for your income.
• Avoid unnecessary credit applications.

Is it worth paying off HECS before applying?

Sometimes. If your balance is small and the repayment is the reason an application falls short, clearing it may help, and a few lenders may exclude it if it will be repaid soon anyway. If clearing it would cut into your deposit, the trade-off may not be worth it. A broker can compare how lenders would treat it.

Example scenarios

Scenario 1: Graduate with a $40,000 HELP balance

A graduate earns $85,000 and has a clean credit report. HECS does not appear on the credit file, but lenders count the compulsory repayment, which reduces borrowing power.

Scenario 2: Small balance close to paid off

A borrower owes $6,000 and will clear it within a year. Some lenders’ policies allow the repayment to be excluded in these circumstances, with evidence from the ATO portal.

Scenario 3: Clean HECS, missed card payments

An applicant has HECS and two late credit card payments last year. The late payments, not the HECS debt, are more likely to show on the credit report and affect the score.

Scenario 4: Still studying

A part-time student working full time applies for a loan. Some lenders’ exclusion options do not apply to applicants still studying, so the repayment is likely to be counted.

So, does HECS debt affect your credit score?

Generally no. HECS-HELP is managed by the ATO rather than by a credit provider, so it is not one of the things that usually appears on a credit report. Lenders can still count your compulsory repayments, which can reduce borrowing power.

The strongest applications usually have:

• a clean credit report with no missed payments
• HECS disclosed accurately with a current ATO balance
• low or no unused credit card limits
• stable income that comfortably supports the repayments
• a deposit that has not been eaten into to clear HECS
• a lender whose policy treats HELP repayments in a way that suits the situation

Need help with a home loan and HECS debt?

A Fundd mortgage broker can help you compare options and check whether current lender policies may suit your HECS situation. We can review your income, HELP balance and other debts with you before you apply.