Leslie Massey
Your credit score is a number that summarises your credit report, which includes personal and financial information about you. It is used by credit providers like banks and credit card companies to assess how responsible you are to lend to. Generally, a higher credit score is better as it indicates lower risk. Credit scores are calculated based on various factors, including credit limits, repayment history, overdue debts, and the types of loans or credit applied for. In Australia, individuals can obtain their credit score for free from online providers, such as GetCreditScore, Credit Savvy, and Finder, which offer additional benefits like personalised offers and monthly updates. It is recommended to regularly check your credit score to monitor for any fraudulent activity and protect yourself from identity theft.
| Characteristics | Values |
|---|---|
| Credit score range | 0-1000 or 0-1200 |
| Credit score providers | Equifax, Experian, Illion, Credit Savvy, Finder, GetCreditScore |
| Credit score calculation factors | Credit limits, repayment history, overdue debts, frequency of credit applications, types of loans or credit applied for |
| Credit report contents | Credit rating, credit products held, repayment history, personal details (name, gender, date of birth, driver's license number, etc.), credit score |
| Identity theft protection | SavvyShield, Equifax Identity, Finder credit report, GetCreditScore |
| Other features | Monthly updates, special offers, tips for improvement, identity checks, encryption |
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What You'll Learn
How to get your credit rating for free
A credit score is a number that summarises the credit information from your credit report. Credit scores are used by credit providers like banks and credit card companies to determine how responsible you are to lend to. Generally, a higher credit score is better as it indicates lower risk. Your credit score is calculated based on your current situation and past behaviour, including credit limits, repayment history, overdue debts, how often you've asked for credit, and the types of loans or credit you've applied for.
In Australia, there are three Credit Reporting Bodies that provide free credit reports: Equifax, Experian, and Illion. You can obtain a free copy of your credit report from these organisations, which you are eligible to do every three months. It is recommended that you get a copy at least once a year. You can also request your credit report by other means if you are unable to order it online.
There are also online credit score providers that offer free credit scores, such as GetCreditScore. These providers use data from one or more credit reporting agencies to calculate your score. However, you should be cautious when signing up and avoid any provider that asks for your credit card details or payment. Additionally, these providers may use your personal information for marketing purposes, so be sure to review their privacy policies and opt out of marketing if desired.
It is important to regularly check your credit score and report to ensure accuracy and protect yourself from identity theft, which is one of the fastest-growing crimes in Australia. If you find any mistakes or outdated information on your credit report, you can contact the credit reporting agency to fix it for free. Keeping an eye on your credit profile can also help you understand and address any changes in your score.
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Credit report errors and how to fix them
A credit report is a record of your credit history, including your credit rating, credit products, and repayment history. It is important to stay on top of the content of your credit reports as errors can adversely impact your ability to get loans, new lines of credit, or better lending terms and interest rates.
If you find an error in your credit report, you have the right to dispute it. The first step is to contact the credit reporting company (such as Experian, Equifax, or Transunion) and explain what you believe is wrong and why. You should provide any relevant documents or information that supports your dispute. You can also ask the company that provided the information to the credit reporting company to investigate your dispute.
If the information is found to be inaccurate, it will be removed or changed. If the furnisher determines that the information is accurate, you can request that the credit reporting company include a statement explaining the dispute in your credit report.
- Accounts reported more than once - This can make it appear that you have more open lines of credit or higher debt than you actually do. Ensure that your report reflects any closed accounts, indicating that they were "closed by the granter".
- Incorrect debts - If you are divorced, ensure that your former spouse's debts are not reflected on your report. Also, be aware of older bad debts that should have been removed after seven years, as well as mysterious accounts and debts that could be a result of identity theft.
- Missing accounts - Not all creditors voluntarily supply information to credit bureaus, so if you find missing accounts, ask your creditors to start reporting your credit information to credit bureaus, or consider moving your account to a different creditor who regularly reports to credit bureaus.
- Inconsistent name usage - Ensure that you always use the same first name and middle initial when applying for credit to avoid having multiple names associated with your credit report.
It is important to be proactive in monitoring your credit report and addressing any errors to maintain a positive credit history and ensure you have access to the best lending options.
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How to protect your credit rating from identity theft
In Australia, credit scores are calculated by credit reporting agencies based on credit reports, which contain personal and financial information. These credit scores are used by credit providers like banks and credit card companies to assess an individual's credit risk.
Identity theft is a type of fraud that involves stealing and using another person's personal data to borrow money or make credit purchases. This can happen through various means, including mail theft, pickpocketing, electronic data theft, email or phone scams, spyware, and unsecured internet connections.
- Regularly review your credit report: Obtain a copy of your credit report from each of the three main credit reporting bodies in Australia: Equifax, Experian, and Illion. You are eligible to receive a free copy of your credit report from each agency once every three months. Reviewing your credit report can help you identify any suspicious credit applications or discrepancies that may indicate identity theft.
- Set up alerts: Utilize alert services, such as Veda Advantage's My Veda Alert, which notifies you whenever your credit file is accessed or any changes are made to your address information. This allows you to proactively monitor your credit profile and quickly detect any irregular activity.
- Place a ban on your credit report: If you suspect or confirm identity theft, contact the credit reporting bodies and request a temporary ban on your credit report. This will prevent credit providers from accessing your credit report for the ban period, typically 21 days, and can be extended if necessary.
- Secure your personal information: Be cautious about providing personal details over the phone or online. Use strong and unique passwords for your online accounts, and avoid sharing sensitive information on social media or unsecured websites.
- Report identity theft: If you believe your identity has been stolen, notify your local police station and file a report. Many organizations will require a police report before they can take action to rectify the situation and cancel any fraudulent credit accounts opened in your name.
- Protect your mail: Ensure your mailbox is locked and regularly emptied to reduce the risk of mail theft, which is a common method used by identity thieves to access personal information.
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How your credit rating impacts loan applications
Your credit score is a numerical representation of your creditworthiness. It is a summary of the credit information from your credit report. The higher your score, the better your credit profile. Credit providers like banks and credit card companies use your credit score to understand how responsible you are to lend to. They use it to determine how likely you are to repay borrowed money.
In Australia, your credit score typically ranges from 0 to 1,200. The higher your score, the less risky you are considered by lenders. This could mean getting a better deal and saving money. A lower score will affect your ability to get a loan or credit. Each loan application can result in a hard check, which can potentially lower your score. Therefore, multiple rejections can lead to a lower score due to repeated checks.
Maintaining a lower credit utilisation rate can positively impact your credit score. Lenders prefer a credit utilisation rate below 30%, as it shows you are not reliant on borrowed money. The age of your credit history also plays a role in determining your credit score. A longer credit history provides more data for lenders to assess your creditworthiness.
Having a below-average credit score in Australia can significantly limit your financial opportunities. However, it is not a permanent stain on your financial record, and you can take steps to improve it steadily. You can regularly monitor your score and work on improving it. A good credit score can open doors to more favourable loan conditions and better interest rates.
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Credit rating bands and what they mean
Credit scores in Australia fall between 0 and 1,000 or 0 and 1,200, depending on the credit reporting body. The higher the score, the stronger your borrowing capacity. The lower the score, the riskier you appear to lenders, which can make borrowing money more challenging.
There are three main credit reporting agencies in Australia: Equifax, Experian, and illion. Each agency uses a slightly different formula to calculate credit scores and does not share the full details of the algorithms. This variation means your credit score may differ from one agency to the next, and you may not know why one is higher than another.
Equifax (scores 0-1,200)
- Below average
- Average
- Good
- Very good
- Excellent
Experian (scores 0-1,000)
- Below average
- Fair
- Good
- Very good
- Excellent
Illion (scores 0-1,000)
- Low score
- Room for improvement
- Good
- Great
- Excellent
Credit scores fall into ranges or 'bands', which are often referred to as credit ratings. These bands are given names such as average, good, very good, and excellent. A higher score means the lender will consider you less risky. This could mean getting a better deal and saving money. A lower score will affect your ability to get a loan or credit.
You can view your credit score for free through one of Australia’s major credit agencies or a verified third-party provider.
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Frequently asked questions
There are several ways to check your credit rating in Australia for free. You can use an online credit score provider, such as GetCreditScore, Credit Savvy, or Finder. You can also contact the three Credit Reporting Bodies in Australia (Equifax, Experian, and Illion) directly to request a free copy of your credit report.
A credit score is a number that summarises the credit information from your credit report. It is used by credit providers like banks and credit card companies to assess how responsible you are to lend to. The higher your credit score, the more likely you are to be approved for credit. Generally, a credit score in Australia is a number between 0 and 1000 or 1200.
It is recommended to check your credit rating in Australia at least once a year. You are entitled to a free copy of your credit report every three months, so checking it regularly can help you monitor any changes and protect yourself from identity theft.
