Short answer: It can be done, but lenders will want to know about the debt, see that you're on a repayment arrangement, and count those repayments in your budget. ATO and Centrelink debts often don't appear on your credit file, but you still need to disclose them. Hiding them can lead to a decline or a loan you can't afford.
Do these debts show on your credit file?
- Personal ATO debts generally aren't reported to credit reporting bodies.
- Business tax debts can be. The ATO may report a business with an ABN that owes $100,000 or more, overdue by more than 90 days, and isn't engaging with the ATO to manage it.
- Centrelink debts generally aren't listed on your credit file, but they're a real debt and may be recovered from your payments, your tax refund, or through a collection agency.
Lenders will still ask about all debts in the application, and they often spot repayments or deductions in your bank statements or Centrelink income statements.
How lenders tend to assess it
| Situation | Likely view |
|---|---|
| Payment plan in place and up to date | Often acceptable. The plan repayment is counted as an expense. |
| Debt recently paid off | Usually fine, with evidence it's cleared |
| No arrangement, or payments missed | Many lenders will decline until it's sorted |
| Large business tax debt listed on your credit file | Harder. Usually needs time and a clear repayment history. |
Sort the debt out first
- ATO: You can set up a payment plan online or by phone. Keeping your lodgments up to date matters too. See ato.gov.au.
- Centrelink: You can arrange repayments and ask for a review if you think the debt is wrong. See servicesaustralia.gov.au.
- Get written confirmation of the arrangement and the current balance. Lenders often ask for it.
The renting side
As a renter, your rent is usually your biggest fixed cost. Lenders will compare your income with your rent, debt repayments and living costs. Paying rent on time from your bank account, and having your lease handy, makes this straightforward.
Before you apply
- List every debt, including ATO, Centrelink, buy now pay later and credit cards.
- Keep 3 months of bank statements that show your payment plans being met.
- Choose a car and loan size that leaves a buffer after rent and plan repayments.
- If things feel stretched, talk to a free financial counsellor on the National Debt Helpline (1800 007 007) first.
Paying off an ATO or Centrelink debt? Tell us about your situation in about 60 seconds and a licensed broker will call you. No credit check to enquire.
Related guides
- Car finance with existing debt
- Car finance on Centrelink top-up income
- How unpaid fines affect car loan approval
General information only. This isn't financial advice. Finance the Ride is a referral service and doesn't hold an Australian Credit Licence. Last reviewed September 2026.
