Credit Score Basics Australia | Check, Understand & Improve
Short answer
Your credit score in Australia is a number that summarises your creditworthiness based on your borrowing and repayment history. Three bureaus — Equifax, Illion, and Experian — each calculate their own score using slightly different models. Payment history is the biggest factor, followed by credit applications, available credit, and the types of credit you hold. You can check your score for free, and improving it before applying for a loan can save you thousands in interest.
The three bureaus
Equifax (0-1200), Illion (0-1000), and Experian (0-1000) each maintain a separate file on you. Lenders typically check one or two. You can request a free copy of your report from each bureau once a year, or use free services that provide ongoing access.
What affects your score
Payment history (on-time vs late), number of credit applications in the last 5 years, total credit limits available to you, defaults or court judgments, and the age and diversity of your credit accounts. Since Comprehensive Credit Reporting, positive repayment data also helps.
How to improve it
Pay all bills on time, reduce unused credit card limits, avoid applying for credit you do not need, fix any errors on your report, and wait out old negative events. Most improvements take 3 to 6 months to flow through to your score.
Common mistakes
- Applying for multiple loans or credit cards in a short period — each application creates a hard inquiry that can lower your score and signal risk to lenders.
- Keeping old credit cards with high limits open — even if unused, available credit is factored into serviceability assessments and can reduce borrowing power.
- Not checking your credit report for errors before applying — incorrect defaults or wrong personal details are more common than you think and can be disputed.
- Paying only the minimum on credit cards — while it avoids a missed payment, high utilisation (balance close to limit) negatively affects your score.
Borrowing power calculator
See how your income and existing debts affect what lenders will approve.
Pre-approval planning
Work backwards from comfortable repayments to a realistic borrowing range.
Check before you apply
A good credit score opens better rates — know where you stand.
Understand your borrowing position before making credit applications that affect your score.
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Frequently Asked Questions
- Does checking my own credit score hurt it?
- No. Checking your own credit score is a "soft inquiry" and does not affect your score. Only "hard inquiries" from lenders when you apply for credit are recorded and can temporarily lower your score.
- How long do defaults stay on a credit report in Australia?
- Defaults remain on your credit report for 5 years from the date they are listed. Serious credit infringements (like fraud-related defaults) remain for 7 years. Court judgments also stay for 5 years.
- What is the minimum credit score for a home loan in Australia?
- There is no single minimum — each lender sets their own threshold. Generally, a score above 600 (Equifax scale) gives you a reasonable chance with major banks. Above 700 is considered good. Below 500 makes mainstream lending very difficult.