Canstar’s Credit Score Hub explains everything you need to know about your credit score and your credit report, including:
A credit score or credit rating is a number calculated by a credit bureau (a credit reporting agency). This number represents how trustworthy your reputation is as a borrower.
Lenders use this number (on a scale of 0-1,200 or 0-1,000) to decide whether or not you are eligible for a credit card or loan, and when deciding what interest rate to charge on your loans.
Find out more about credit scores or credit ratings
A credit report provides information about your credit history as a borrower. This report is used by lenders to determine whether or not you are eligible for a loan or a credit card.
Your credit report contains information about any applications you have made for credit cards, loans, or other credit products, credit accounts and loans you currently have and have had in the past, overdue accounts or late payments, bankruptcy, and other credit-related information.
A credit score is a number between 0 and 1,200 that is used to grade how trustworthy your credit report is, while a credit report is a report that provides information about your credit history.
It’s beneficial to check both regularly so that you can see if an error appears on your credit report and your credit score goes down. Ensure you are trustworthy borrower, and you increase the chances that a lender will grant you the loan or credit card you want.
There are different credit services that will allow you to check your credit score, your credit report, or both. Most are very simple to use and will only require some information to correctly identify you.
Does looking at your credit score lower it?
No, checking your credit score will not lower your credit score. Checking your credit report or score will not affect whether lenders feel you are trustworthy enough to lend to.
Checking your credit report is important as it allows you to check for errors or incorrect information. To fix errors in your report, you can discuss them with the credit reporting agency. The credit reporting agency will contact the credit provider who gave them the incorrect information.
If this does not resolve the issue, you can make a complaint to the Financial Services Ombudsman (FOS). If the Ombudsman does not resolve your complaint, you can make a complaint to the Office of the Australian Information Commissioner (OIAC), also known as the Privacy Commissioner.
Your credit score is usually on a scale between 0 and 1,200 or between 0 and 1,000 depending on the credit reporting agency you use to check your credit score.
Here’s how Equifax (formerly known as Veda) determines whether your credit score is ‘excellent’ or ‘below average’:
| Credit-worthiness | Excellent | Very Good | Good | Average | Below Average |
|---|---|---|---|---|---|
| Score | 833 – 1,200 | 726 – 832 | 622 – 725 | 510 – 621 | 0 – 509 |
| Source: Equifax.com.au (formerly Veda) | |||||
An excellent credit score means you’re in the top 20% of the credit-active population from Equifax. Lenders expect you are highly unlikely to experience a default, court judgment, or bankruptcy in the next 12 months. You have a 5 times better than average chance of keeping a clean credit report.
How can I keep it
There’s always room to improve when it comes to your credit score. To hold onto an excellent credit score, keep a hold of any good credit card or loan where you have a positive repayment history.
Read this article to find out how borrowers can keep their credit score above 900
Find out more about keeping your credit score:
A very good credit score means lenders expect you are unlikely to experience a default, court judgment, or bankruptcy in the next 12 months. You have a 2 times better than average chance of keeping a clean credit report.
How can I keep it or improve it
There’s always room to improve when it comes to your credit score. To improve a very good credit score, keep checking for credit report errors, and keep a hold of any good credit card or loan where you have a positive repayment history.
Read this article to find out how borrowers can keep their credit score above 900
Find out more about keeping and improving your credit score:
A good credit score means lenders expect you are less likely to experience a default, court judgment, or bankruptcy in the next 12 months. You have a better than average chance of keeping a clean credit report. What should I do to improve it?
To improve a good credit score, avoid any credit indiscretions and hang onto any good credit card or loan where you have a positive repayment history.
Read this article to find out how borrowers can keep their credit score above 900.
Find out more about fixing or improving your credit score:
How to improve your credit rating
How I kept my credit score above 900
An average credit score means lenders expect you are likely to experience a default, court judgment, or bankruptcy in the next 12 months.
What should I do to fix or improve it?
To fix or improve an average credit score, you should pay off any debt and set up payment plans with your credit providers. Review your credit report to check for errors before and avoid making frequent applications for loans or credit cards.
Find out more about fixing or improving your credit score:
How to improve your credit rating
How I kept my credit score above 900
A below average credit score means you’re in the bottom 20% of the credit-active population in Australia, according to Equifax. Lenders expect you are more likely to experience a default, court judgment, or bankruptcy in the next 12 months.
What should I do to fix it?
To fix a below average credit score, you should pay off any debt or set up a payment plan with your credit providers. Review your report for errors and fix them if they are present. If you are in financial trouble, you should speak to a free financial counsellor for help.
Find out more about fixing or improving your credit score:
How to improve your credit rating
How to fix credit report errors
How long does it take to rebuild your credit score?
The following things will affect your credit score:
It is entirely possible to apply for a credit card or loan with bad credit or with no credit history at all. Here are our best tips on how to do it successfully:
