What Is A Good Credit Score In Australia?

In Australia, it’s important to have a high credit score if you want to get loans or credit cards. But what does a “good” credit score really mean? This article will explain what credit scores are, the different ranges used in Australia, and how you can raise your score.

What Is A Credit Score?

A credit score is a number calculated based on your credit history and reports. It represents your creditworthiness or likelihood of repaying debts. In Australia, there are three main credit bureaus that calculate credit scores:

• Equifax
• Experian
• Illion

Each bureau may calculate your score slightly differently, but scores generally range from 0 to 1,000 or 0 to 1,200 The higher the number, the better your creditworthiness Lenders use your credit score along with other factors to make lending decisions.

Credit Score Ranges In Australia

While each bureau has their own scale, here are the general credit score ranges used in Australia:

Equifax (0-1,200)

• 0-459: Below Average
• 460-660: Average
• 661-734: Good
• 735-852: Very Good
• 853-1,200: Excellent

Experian (0-1,000)

• 0-549: Below Average
• 550-624: Fair
• 625-699: Good
• 700-799: Very Good
• 800-1,000: Excellent

Illion (0-1,000)

• 0-299: Low Score
• 300-499: Room for Improvement
• 500-699: Good
• 700-799: Great
• 800-1,000: Excellent

So in general, a “good” credit score starts around 600-700 for most bureaus. The higher the better when applying for loans or credit cards.

What Impacts Your Credit Score?

Many factors influence your credit score. Here are some of the main ones:

• Payment history – Whether you pay your bills on time. Late payments can lower your score.

• Debt levels show how much you owe compared to how much credit you can get. High debt can lower your score.

• Length of credit history: For how long have you had credit? A longer history helps your score.

• New credit – Opening many new accounts in a short period can lower your score.

• Credit mix – Having different types of credit (credit cards, loans, etc). A mix helps your score.

• Hard inquiries – When lenders check your credit report. Too many inquiries can lower your score.

Tips For Improving Your Credit Score

If you want to raise your credit score, here are some tips:

• Pay all bills on time – Set up automatic payments or payment reminders. Being late can severely damage your score.

• Lower credit utilization – Keep balances low compared to limits. High utilization hurts your score.

• Don’t close old accounts—Having accounts that have been open for a long time is good for your score, so don’t close your oldest accounts.

• Limit hard inquiries – Only apply for credit when needed to avoid too many inquiries. Check your own credit report instead of allowing inquiries.

• Correct any errors – Dispute and correct any inaccuracies on your credit reports that may be damaging your score.

• Demonstrate responsible use – Use a small portion of your available credit and make at least the minimum monthly payments.

• Build credit history – If you have no credit accounts, consider a secured credit card to start building your credit history. Use it responsibly.

Monitor Your Credit Score

Check your credit reports and scores regularly from all three bureaus to monitor your progress. You can obtain free copies of your reports annually. Monitoring lets you catch any errors and see the impact of your financial habits.

A good credit score takes time and effort to build, but it’s worthwhile for getting approved for credit and better loan terms in Australia. Take steps to strengthen your credit history and your score will gradually improve.