According to ASIC's MoneySmart, your credit score is a number that represents your creditworthiness based on your credit history. Lenders use it alongside other factors to decide whether to lend to you and at what interest rate.
What is a Credit Score?
Your credit score is calculated by credit reporting bodies (bureaus) based on information in your credit report. It gives lenders a quick snapshot of how risky you might be as a borrower.
What's in Your Credit Report?
- Personal information - Name, address, date of birth, employer
- Credit accounts - Loans, credit cards, and their limits
- 24 months repayment history - Whether you paid on time
- Credit enquiries - Applications you've made for credit
- Defaults and bankruptcies - Serious credit events
Important to Know
A credit score is not the only factor lenders consider. They also assess your income, expenses, employment stability, and whether you can afford the repayments. A high credit score doesn't guarantee approval.
The Three Credit Bureaus in Australia
Australia has three main credit reporting bodies. Each creates their own credit score from the data in your credit report, which means you may have different scores with each bureau.
Equifax
Score range: 0 - 1,200Formerly known as Veda, Equifax is the largest credit reporting agency in Australia. Most lenders use Equifax scores.
Get your free Equifax reportExperian
Score range: 0 - 1,000A global credit reporting agency with a significant presence in Australia. Offers free credit score monitoring.
Get your free Experian reportIllion
Score range: 0 - 1,000Formerly known as Dun & Bradstreet Australia. Provides credit reports and business information services.
Get your free Illion reportYour right to free access: By law, credit reporting agencies must give you free access to your credit report once every three months. Different agencies can hold different information, so check all three.
Credit Score Ranges Explained
Each bureau uses different scales, so a "good" score varies. Here's how to interpret your score:
Equifax (0 - 1,200)
| Rating | Score Range | What It Means |
|---|---|---|
| Below Average | 0 - 459 | May have difficulty getting credit approval |
| Average | 460 - 660 | May be approved but possibly at higher rates |
| Good | 661 - 734 | Likely to be approved for most credit products |
| Very Good | 735 - 852 | Access to competitive interest rates |
| Excellent | 853 - 1,200 | Best rates and highest approval chances |
Experian & Illion (0 - 1,000)
| Rating | Experian | Illion |
|---|---|---|
| Below Average | 0 - 549 | 0 - 299 |
| Average | 550 - 624 | 300 - 499 |
| Good | 625 - 699 | 500 - 699 |
| Very Good | 700 - 799 | 700 - 799 |
| Excellent | 800 - 1,000 | 800 - 1,000 |
What Affects Your Credit Score
Positive Factors (Increase Your Score)
- Paying bills on time - Your repayment history over 24 months is the biggest factor
- Long credit history - Older accounts with good history help your score
- Low credit utilisation - Using less than 30% of your available credit
- Mix of credit types - Having different types of credit (cards, loans) managed well
Negative Factors (Decrease Your Score)
- Late or missed payments - Even one missed payment can impact your score for years
- Defaults - Unpaid debts over $150 that are 60+ days overdue (stays on file 5 years)
- Multiple credit applications - Each application creates an enquiry that lasts 5 years
- Bankruptcy or Part IX agreement - Severe impact, stays on file for 5-7 years
- High credit card balances - Using most of your available credit limit
How long do negative marks stay? Defaults remain for 5 years. Bankruptcies stay for 5-7 years. Credit enquiries stay for 5 years but only impact your score for about 12 months.
How to Improve Your Credit Score
Check Your Credit Report for Errors
Get free copies from all three bureaus. Look for incorrect personal details, accounts that aren't yours, or outdated information. You can dispute errors directly with the bureau.
Pay Bills on Time
Set up direct debits or payment reminders. Your repayment history is the single biggest factor in your score. Even paying the minimum on time is better than missing payments.
Reduce Credit Card Balances
Aim to use less than 30% of your credit limit. If you have a $10,000 limit, try to keep the balance under $3,000. Consider requesting a lower limit if you don't need it.
Limit Credit Applications
Each application creates a "hard enquiry" on your file. Multiple applications in a short time can signal financial stress. Space out applications and only apply for credit you need.
Keep Old Accounts Open
A longer credit history helps your score. Don't close old credit cards unless they have annual fees you want to avoid. An unused card with a long history can help your score.
Address Outstanding Defaults
Paid defaults look better than unpaid ones. Contact creditors to negotiate payment arrangements. Some lenders consider paid defaults more favourably when assessing applications.
Beware of Credit Repair Scams
Be cautious of companies promising to "fix" your credit for a fee. Legitimate errors can be fixed for free by disputing them with the credit bureau. Check that any company is licensed on ASIC's register.
Official Resources
Check Your Finance Options
Understanding your credit score is the first step. We work with 40+ lenders, including specialist lenders for those with less-than-perfect credit.