735 Credit Score: Is it Good or Bad?

So, you’ve checked your credit score and it is 735. But what does that mean? Is that a good score or could it hold you back? We take a look at a credit score of 735, and reveal what it could potentially mean for you when applying for credit.

What does a credit score of 735 mean?

According to credit rating bureau Equifax, which powers Canstar’s credit score tool, if you’ve checked your score and have a rating of 735, that means you have a Very Good credit score. Kudos to you! This is the second highest credit rating band and indicates that you have an impressive credit history. Equifax’s highest credit rating band is Excellent, but having a ‘Very Good’ rating still puts you well ahead of the average Australian when it comes to credit risk.

The other two credit bureaus that operate in Australia, Experian and Illion, have their own credit score scale and bands.

What does a Very Good credit score mean?

Equifax’s data shows people who score in this range are twice as likely as the average Equifax credit report holder to keep a clean credit record over the next 12 months, and are unlikely to incur an adverse event during this time. Credit scores of 735 to 852 are considered to be in the Very Good band.

Is a credit score of 735 good or bad?

Whether or not a credit score is ‘good’ or ‘bad’ depends on what you want to use it for and your circumstances. The higher your credit score, typically the more likely you are to be approved for credit. As you have the second highest rating – Very Good – this means your application should be viewed more positively by lenders than applicants with a lower score. In this sense, a ‘Very Good’ credit score is a ‘good’ thing.

It’s important to keep in mind, though, that a credit score is only one factor lenders take into consideration when reviewing loan applications. So while having a high credit score may help, it’s no guarantee that you would be automatically approved. This is partly because the scores, and the groupings of the score into the various bands, are based on general assumptions made from financial behaviour data collected by credit bureaus.

Learn more: What do lenders look for in a borrower?

What are the benefits of having a Very Good credit score?

If you have a Very Good credit score, it’s likely that:

lenders, and any company using a credit score to judge your risk, would view a Very Good credit score favourably, which could mean that it could be easier for you to be approved for a loan than applicants with a lower score than you.
you may well represent a desirable customer, as your credit history should show that when you borrow funds, you pay them back on time. That could mean that you have more bargaining power than other customers with a lower score than you, so it could be worthwhile haggling with your lender for a better interest rate, loan features or other incentives.
banks and lenders may be willing to let you borrow more money if you have a high credit score, because you have shown an ability to meet your repayments on time in the past. While it may be useful to have the option to borrow greater amounts depending on your plans, it’s also important to consider whether you would be able to meet the increased repayments without placing strain on your finances.

Learn more: Take advantage of a high credit score

What can you do with a credit score of 735?

If you have a Very Good credit score, it may be that your business is more highly prized by lenders than other borrowers, and therefore there are more products available for you to apply for, and that you may be more easily approved for credit than other applicants with a lower credit score. So, if you need to borrow funds, having a Very Good credit score could prove helpful. That being said, it’s only one thing a lender looks for when approving a loan.

One thing you may want to consider is maintaining your credit score. You may even want to boost it into the next band. Let’s take a look at what impacts your credit score and what you may be able to do to improve it.

What factors affect your credit score?

Credit scores can go up, or down, over time, as scores are recalculated frequently by credit agencies as new information is lodged on your credit history. Some of the most common factors that can affect your credit score are:

Your repayment history (making loan or credit repayments and paying bills).
The number of credit applications or enquiries you have made.
Negative information such as defaults (where you fail to pay back a debt), bankruptcies and court judgements against you.
Personal details like your age and how long you’ve been at your current job and residential address.
How far back your credit history goes – generally it begins the first time you apply for credit.

It’s worth noting that since Comprehensive Credit Reporting was introduced, lenders see some of your positive financial behaviours on your credit report, such as when you make loan repayments on time. This is designed to give lenders a fuller picture of your credit history.

Learn more: How is your credit score calculated?

How can you improve a credit score of 735?

Achieving a Very Good credit score is no mean feat. It takes financial discipline. So, it’s likely that you already have healthy money habits in place. However, if you do want to improve your score, to perhaps even achieve the Excellent band rating, there are a few things that you could try.

Examine your credit report in detail. A credit report is what your credit score is based on. Look for such things as:

Inaccuracies in the loans that you currently have, such as mistakes in amounts or types of credit that you currently hold.
Applications that you didn’t make. This could be simply a mistake or, more troubling, a sign that someone may be using your identity to take out loans.
Opportunities to improve your credit, such as reducing the credit limit of credit cards.
When negative credit events will expire (at which point they will be removed from your credit history).

If you notice any mistakes on your credit report, you can contact the issuing credit bureau to request a correction. However, keep in mind that there is no ‘instant fix’ that will improve your score overnight, it could take some time for the changes to take effect.

Plus, It could also be a good idea to check your credit score and report from time to time, to make sure your rating hasn’t slipped. Generally speaking, most lenders in Australia will report monthly to credit agencies.

Learn more: How to improve your credit score.

Learn more about your credit score

What is a credit score?

A credit score is a rating that shows how risky a credit bureau believes you to be when it comes to borrowing (and paying back) money. It’s a number that companies, including financial institutions, typically look at when they are deciding to do business with you, such as when assessing a loan application. Credit bureaus, including Equifax, calculate your credit score by taking into account anything recorded on your credit history.

Your credit history is a record of your financial footprint, such as how many credit cards you may have, what your repayment history is like, or if you have a home loan. It typically also includes any applications for credit, regardless of whether or not you were approved for that credit.

Check your credit score for free with Canstar.

What are the credit score bands?

Credit scores grouped into ‘bands’, based on that population-level data.

Credit score of 0 (or below) to 459: Below Average

Equifax says scores in this range belong to people who are more likely than consumers in the higher ranges to experience an adverse event such as default, bankruptcy or court judgement in the next 12 months. (Canstar’s credit score tool’s scale starts at 0, so any negative scores are expressed as 0.)

Credit score of 460 to 660: Average

If you score in this range, Equifax data shows it is likely you’ll incur an adverse event such as a default, bankruptcy or a court judgement in the next 12 months.

Credit score of 661-734: Good

Equifax’s data shows people who score in this range are more likely than consumers who score in the lower ranges to keep a clean credit report in the next 12 months, and are less likely to experience an adverse event during this period.

Credit score of 735-852: Very Good

Equifax’s data shows people, like yourself, who score in this range are twice as likely as the average Equifax credit report holder to keep a clean credit record over the next 12 months, and are unlikely to incur an adverse event during this time.

Credit score of 853-1200: Excellent

Equifax’s data shows people who score in this range are in the top 20% of Australian consumers with an Equifax credit report and are highly unlikely to experience an adverse event that will harm their credit score in the next 12 months.