Does bad credit mean I can’t borrow?
No. It usually means some lenders won’t, and others will — on different terms. Mainstream banks tend to rely heavily on credit scores and clean financials, so a default can be an automatic no. Other lenders take a more rounded view: they look at the security you can offer, how the business is trading now, and the story behind the marks on your file.
That’s the heart of what we do. We know which lenders on our panel are comfortable with which situations, so you’re not spraying applications around hoping one sticks.
What does “bad credit” actually mean in New Zealand?
It can mean several different things, and lenders treat them differently:
- A low credit score — often a result of limited history or lots of recent applications.
- Late payments or arrears — repayments made late on existing credit.
- Defaults — debts that were significantly overdue and listed by a creditor. They generally stay on your file for five years.
- Judgments or insolvency events — more serious, and dealt with case by case.
- Tax debt — Inland Revenue has signalled it will make more use of sharing information about serious company tax debt with credit reporting agencies, so this is increasingly relevant.
New Zealand has three consumer credit reporting agencies: Centrix, Equifax and Experian (which took over illion’s New Zealand credit bureau in 2024). Each may hold slightly different information, so check all three. Our guide to understanding your credit score walks you through it.
How can I improve my chances?
- Get your credit reports first so you know exactly what a lender will see. Checking your own file doesn’t hurt your score.
- Fix any errors. Mistakes happen, and credit reporters must correct wrong information.
- Pay or settle outstanding defaults if you can — a paid default reads better than an unpaid one.
- Write a short, honest explanation: what happened, when, and what’s different now.
- Get your business banking tidy for a few months: all income through one account, no bounced payments.
- Apply once, in the right place. Multiple applications add enquiries to your file.
Lenders aren’t looking for perfect people. They’re looking for people who understand what went wrong and have fixed it.
Which options are realistic?
| Situation | What often works |
|---|---|
| Past defaults, property with equity | Property-secured loan from $20,000 up to $1m — bad credit, defaults and arrears considered case by case |
| Recent arrears, strong trading now | Unsecured loan where recent bank statements carry the weight |
| Tax debt dragging your file down | Property-secured loan to pay out IRD |
| Very recent, unresolved problems | Sometimes the honest answer is: stabilise first, borrow later |
Every loan is priced on your individual situation, and credit history is part of that picture. We’ll find the sharpest option available for yours and be straight with you about it.
What should I avoid?
Lenders who promise approval “regardless of credit” without asking a single question about the business; offers that demand large fees upfront before approval; and pressure to sign quickly. Our guide to red flags in loan offers lists the warning signs.
How LendFriend helps
Tell us what’s on your file and what’s changed. No judgement — we’ve heard it all, and most of it is just life. We’ll look at your situation and match you with a lender from our panel that genuinely considers credit history case by case. You decide.
Start your enquiry — it won’t affect your credit score.
The honest bit
If you're applying everywhere at once, stop. Each application can leave an enquiry on your credit file, and a cluster of them looks like desperation to the next lender. One well-prepared application through someone who knows where it fits beats ten hopeful ones.