Damon Mcknight
In Australia, a good credit score is generally considered to be above 660, with scores above 853 considered excellent. The average Australian credit score was 855 in 2023, according to Equifax, one of the country's three main credit reporting agencies, alongside Experian and Illion. Credit scores in Australia fall between 0 and 1,000 or 0 and 1,200, depending on the reporting body, and are calculated based on information in an individual's credit report, including repayment history, the number of credit applications, and personal details.
| Characteristics | Values |
|---|---|
| Credit score range | 0-1,000 or 0-1,200 |
| Credit score calculation | Based on credit report data |
| Credit report data | Borrowing history, repayment history, number of credit applications, age, length of employment, time at current address |
| Credit score categories | Excellent, Very good, Good, Average, Below average |
| Good credit score | Above 660 |
| Excellent credit score | Above 853 |
| Average credit score in Australia | 855 |
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What You'll Learn
Credit scores and their ranges
Credit scores in Australia fall between 0 and 1,000 or 0 and 1,200, depending on the 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.
The average Australian credit score was 855 in 2023, according to the Equifax Australian Credit Scorecard. Women had a higher average credit score than men (868 vs 850), while the average credit score was higher for older Australians.
According to Equifax, a score above 660 is considered good, while a score of 853 or above is considered excellent. However, it's important to note that different credit reporting bodies use different formulas to calculate credit scores, so your credit score may vary slightly between agencies. For example, Experian considers a score of 625 or above to be good, while illion considers a score of 500 or above to be good.
Your credit score will change over time as your credit behaviour changes. For example, if you apply for and take on more debt, default on your account, or change your repayment behaviour. Lenders use your credit score as part of their credit assessment criteria, and a higher credit score indicates that you are a responsible borrower and may increase your chances of being approved for credit with better interest rates.
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Credit reporting agencies
Credit reports from these agencies generally include personal information, such as name, date of birth, and address, as well as credit product details like the type of credit, missed payments, and provider information. Credit reports also include current and historical information on specific financial data, such as mortgage payments, credit card limits, and missed utility payments.
It is recommended that individuals regularly review their credit reports to ensure there are no inaccuracies and to maintain a good credit score. Individuals can request a free copy of their credit report from each of the three major credit reporting agencies in Australia every three months. However, individuals may need to submit a separate application to obtain their credit score, which is not always included in the free credit report.
In addition to the three main credit reporting agencies, there are other reputable agencies that offer credit reports and credit score summaries in Australia. These include agencies like Finder and NerdWallet, which offer credit reports and scores through their websites or apps.
It is important to note that credit scores in Australia are calculated differently by each credit reporting agency, so the scores may vary slightly. As a general rule, a credit score above 660 is considered good, while a score of 853 or above is considered excellent. Lenders also consider other factors, such as income, employment history, and existing debt, when making credit decisions.
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Credit score impact factors
Credit scores in Australia are calculated by credit reporting agencies in different ways, so the scores may vary slightly. Generally, a credit score above 660 is considered good, while a score of 853 or above is considered excellent. A good credit score indicates that there are no significant negative events on your credit report, and that you are a responsible borrower.
Positive Impact Factors
- Paying bills and loans on time, including credit cards, utilities, phone plans, mortgages, personal loans, and auto loans.
- Demonstrating that you can handle debt and manage it well.
- Maintaining good financial habits over time.
- Keeping your address and employment details up to date with credit and service providers.
- Reducing credit card limits to signal to lenders that you are managing your finances well.
- Having a long credit history with timely payments.
Negative Impact Factors
- Applying for credit multiple times.
- Being late or failing to pay bills, loans, or credit card payments.
- Having shared accounts and being negatively impacted by the other person's payment behaviour.
- Not fixing errors in your credit report.
- Receiving court summons over unpaid debt or declaring bankruptcy.
- Having too many short-term unsecured loans or credit accounts, which may indicate financial stress.
- Moving home or changing employment frequently, indicating a lack of consistency.
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Credit score improvement
A credit score above 660 is generally considered good in Australia, while a score of 853 or above is considered excellent. However, the definition of a good credit score may vary among lenders, with some considering scores below 675 as average.
Credit scores are calculated by credit reporting agencies, and they indicate how well you manage your finances. A good credit score means that you are a responsible borrower, and it can increase your chances of being approved for credit, with better interest rates.
- Check your credit report regularly: You are entitled to a free copy of your credit report every 12 months. Reviewing your credit report helps you identify any errors or discrepancies that may negatively impact your score. You can then contact the credit reporting agency to fix any incorrect information.
- Make timely payments: Ensure that you pay your bills, such as phone, electricity, rent, and credit card bills, on time. Repeatedly missing repayments can negatively affect your credit score. Setting up automatic bill payments can help you avoid late payments.
- Maintain a good credit history: Lenders look for a strong credit history that demonstrates your ability to repay loans and manage credit products. Make at least the minimum monthly payments on your credit cards and loans to show that you are in control of your debt. Paying more than the minimum can further improve your credit score by reducing monthly interest charges.
- Avoid multiple credit applications: Each new credit application temporarily lowers your score. Multiple applications within a short period can be seen as a risk and negatively impact your creditworthiness.
- Understand creditworthiness: Before focusing on improving your credit score, understand the basics of creditworthiness. Your credit score reflects your history of credit use and your ability to manage debts effectively.
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Credit score access
Credit scores in Australia are calculated by credit reporting bureaus such as Equifax and Experian. These bureaus collect and analyse financial information about individuals to generate a credit score, which is a numerical representation of an individual's creditworthiness.
You can access your credit score by requesting a copy of your credit report from these credit reporting bureaus. This can be done online, by creating an account on their websites and following the prompts to request your credit score. There may be a small fee for this service, depending on the bureau and the type of report requested.
Once you have accessed your credit score, you can review the report to understand the factors that contribute to your score. This includes information such as your credit account history, repayment history, credit enquiries, and any negative events such as bankruptcies or defaults. By understanding these factors, you can identify areas where you may need to improve your financial habits to build a stronger credit score.
It is worth noting that your credit score can change over time, as the information on your credit report is updated regularly. Credit reporting bureaus receive data from various sources, including banks, financial institutions, and utility companies, to ensure that your credit report is an accurate reflection of your credit activity. Regularly checking your credit score allows you to track your financial progress and make informed decisions to maintain or improve your creditworthiness.
Additionally, monitoring your credit score can help detect any discrepancies or errors in your credit report. Inaccurate information on your report may negatively impact your credit score, affecting your ability to access loans or favourable interest rates. By regularly reviewing your credit report, you can identify and dispute any incorrect information, ensuring the accuracy and integrity of your credit history. This proactive approach empowers you to take control of your financial reputation and make strategic decisions to achieve your financial goals.
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Frequently asked questions
In Australia, a good credit score is generally considered to be above 660. However, this may vary depending on the credit reporting agency and the lender. For example, Equifax considers a good credit score to be 661 and above, while Experian considers it to be 625 and above.
An excellent credit score in Australia is generally considered to be above 853. This indicates a strong credit history and can provide access to the best interest rates and favourable loan terms.
You can check your credit score with one of the three main credit reporting agencies in Australia: Equifax, Experian, and Illion. These agencies provide credit reports and summaries, which include your credit score and the factors influencing it.
Several factors can influence your credit score in Australia. These include your repayment history, the number of credit applications, negative information such as defaults or bankruptcies, personal details like age and employment history, and the length of your credit history. Lenders use these factors to assess your creditworthiness and determine the interest rates and loan terms offered.
