Australia’s cost of living squeeze and the RBA’s ongoing rate hikes have put financial stress front and centre for many households. For some, this pressure can tip them into ‘delinquent’ territory—an industry term that’s gaining new relevance in 2025. But what does ‘delinquent’ really mean for your finances, your credit score, and your future borrowing power?
What Does Delinquent Mean in 2025?
In Australian finance, an account is classified as delinquent when required repayments are late—typically 30 days or more past the due date. With APRA’s latest reporting standards, any missed payment on mortgages, credit cards, car loans, or personal loans can trigger this status. In 2025, lenders are even more vigilant, as non-performing loans have crept up following a year of inflation-driven budget blowouts.
- Credit cards: Missing a minimum payment for one billing cycle makes the account delinquent.
- Mortgages: 30+ days overdue flags the loan as delinquent in lender reports and credit files.
- BNPL services: Most report late payments to credit bureaus, potentially affecting your profile.
Delinquency is not the same as default (where the lender may take legal action), but it’s a major warning sign for both borrowers and lenders.
Why Delinquency Rates Are Rising in 2025
The past year has seen a marked shift in Australia’s economic landscape. The RBA’s cash rate sits at 4.6%—a 12-year high. Mortgage repayments for the average Sydney home have risen by over $1,000 a month since 2022, and credit card balances are ticking upwards again after years of decline.
New data from the Australian Prudential Regulation Authority (APRA) shows:
- Mortgage delinquency rates rose to 1.3% in Q1 2025, up from 0.9% a year ago.
- Personal loan and credit card delinquencies now sit at 2.2%, the highest since 2018.
- Buy now, pay later (BNPL) late payments surged as consumers used these services to manage everyday expenses.
The drivers? Wage growth hasn’t kept up with inflation, rents are at record highs, and utility bills continue to climb. For many, one missed payment can quickly spiral into several, especially as ‘buffer savings’ built during the pandemic are exhausted.
How Delinquency Impacts Your Credit and Borrowing Power
Even a single delinquent account can have a lasting impact on your financial reputation. Thanks to comprehensive credit reporting (CCR), all late payments over 14 days are now visible to lenders, not just defaults or collections. Here’s how it plays out:
- Credit score drop: A delinquency can reduce your Equifax or Experian credit score by 50–150 points, depending on severity and frequency.
- Loan approvals: Banks and non-bank lenders may reject applications or offer higher interest rates if recent delinquencies are on your file.
- Difficulty refinancing: As fixed-rate ‘mortgage cliffs’ expire in 2025, those with delinquencies may find it tough to refinance into a better deal.
- Long-term record: Delinquent payments stay on your credit report for two years, even if you catch up later.
Importantly, lenders are under stricter obligations in 2025 to assess a borrower’s ability to repay, with ASIC and APRA cracking down on ‘reckless lending’. This means a history of delinquency is more likely than ever to affect your access to credit.
Practical Steps to Avoid or Resolve Delinquency
The best way to avoid the domino effect of delinquency is to act early and proactively. Here’s what works in 2025:
- Automate repayments: Set up direct debits for all loans and credit cards to avoid accidental misses.
- Contact your lender immediately: If you anticipate a problem, most lenders now offer hardship variations or payment pauses—especially if you reach out before missing a payment.
- Consolidate debts: Consider rolling high-interest debts into a single, lower-rate personal loan if you’re struggling to keep track of multiple repayments.
- Use budgeting tools: Free fintech apps like Frollo and WeMoney are popular in 2025 for tracking upcoming bills and spending triggers.
- Check your credit report: You’re entitled to a free annual credit report—monitor it for any errors or unexpected delinquencies.
If you do fall behind, don’t ignore the problem. Most lenders would rather work with you to find a solution than escalate to collections or court action.
Conclusion: Stay Ahead of Delinquency in 2025
Delinquency isn’t just a technical term for the banks—it’s a real risk for everyday Australians navigating a tougher financial climate in 2025. By understanding what it means, recognising the warning signs, and taking proactive steps, you can protect your credit, keep your options open, and weather the current storm with confidence.
