What is a good credit score in Australia?

What is a good credit score?

In simple terms, your credit score is a number assigned to you by a credit reporting agency as an indication of your ability to pay back a loan based on your financial history. This score is then used by lenders to evaluate your suitability for a loan; the higher the number, the more likely you are to be approved.

To help you understand your credit score, credit agencies may also show you where your credit score fits in a range of banded tiers with names like ‘poor’, ‘good’ and ‘excellent’. However, this is only a guide, and what’s considered a ‘good’ credit score depends on a range of factors like what you need it for and your lenders’ approval criteria.

Having a higher credit score than average for your age may mean lenders are more likely to approve your application for credit or a loan compared to if you had an average or below average score. In some cases, it may also have a positive impact on how much they will lend you, the interest rate they charge and other credit or loan terms.

How do credit agencies classify a ‘good’ credit score?

Different reporting agencies have different definitions of what scores fall into the ‘good’ credit score band.

Equifax:

Looking at Equifax credit scores, a score between 661 and 734 is considered ‘good’, a score between 735 to 852 is ‘very good’, and if your score is above 853 it’s viewed as ‘excellent’.

• Below average: 0-459

• Average: 460-660

• Good: 661-734

• Very good: 735-852

• Excellent: 853-1,200

Experian:

For Experian credit scores, a score between 625 to 699 is considered ‘good’, 700 to 799 is ‘very good’, while scores of 800 and up are deemed ‘excellent’.

• Below average: 0-549

• Fair: 550-624

• Good: 625-699

• Very good: 700-799

• Excellent: 800-1, 000

Illion:

Then looking at Illion, it considers a score of 500 to 699 to be ‘good’, 700 to 799 to be ‘great’, and 800 and above to be ‘excellent’.

• Zero score: 0

• A low score: 1-299

• Room for improvement: 300-499

• Good: 500-699

• Great: 700-799

• Excellent: 800-1, 000

Get your free credit score and summary

How is a credit score calculated??

Banks and lenders are required to give credit reporting agencies certain information on your financial behaviour, which is then compiled into a credit report, which is used to determine your overall score. While every credit reporting agency is different, 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.

Lenders can also 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.

What is a bad credit score?

Having a bad credit score may mean some lenders consider you too risky to lend money, or, depending on the loan type and lender, may charge you a higher interest rate compared to someone with a good credit score. This is generally because you would be seen as less likely to make your loan repayments.

So how low does a credit score need to be to be considered ‘bad’? Equifax considers a score of 459 or lower to be ‘below average’, while Experian views a score below 549 as ‘below average’, and Illion considers a score of 299 or under to be a ‘low score’.

What is the average credit score in Australia?

According to credit rating agency Equifax, the average credit score for Aussies in 2024 was 861. By Equifax’s rating classification, this is considered an ‘Excellent’ score. On a state by state basis, it was found that the ACT, Tasmania and Victoria had the highest average credit ratings, while the lowest were found in the Northern Territory and Queensland.

How can I check my credit report?

You can check your credit history by requesting a credit report from a credit reporting body in Australia (Equifax, Experian and illion). By law, credit reporting agencies must give you free access to your credit report once every three months, however you may need to pay a fee to access it more frequently. Your credit report may not include all the information you want, such as your actual score.

You can also check your credit score using third-party tools, such as Canstar’s free credit score tool.

Canstar’s credit score tool can access your credit report details from Equifax using the information you provide. Your credit report is then presented in a dashboard, so you can see your score and some of the factors that could potentially be influencing it. This way, you can check back in more regularly to see if there are any changes to your score, as well as identify any potential errors without impacting your credit score.

How can you improve your credit score?

Remember, your credit score is not fixed. It is calculated based on what information is available at that point in time. Therefore, it can fluctuate as new information is added to your file. Negative entries will also drop off your credit file after a certain period of time.

If you’re looking to boost your credit score, here are a few things you could do:

• Make sure you make credit repayments and pay bills on time—steps such as creating a monthly budget to manage cash flow, and scheduling automatic payments for bills and other repayments could help with this.

• Limit new applications for credit or loan products where possible.

• If appropriate, consider lowering the limit on any credit cards you have.

• Regularly check your credit report and make sure the information is correct—if it isn’t, you can ask to have it changed, or for comments to be added to your report. It’s free to update your credit report or remove an incorrect listing.

For more ideas, read our article on ways to help improve your credit score. Our Budgeting and Saving Hub may also be helpful.

If you’re feeling overwhelmed by your financial situation, there is help available. You might want to ask your lender for financial hardship assistance or contact a financial counsellor for help. You can speak to a financial counsellor for free by calling the National Debt Helpline on 1800 007 007.