A Credit Score is a number that summarises the information contained in your Credit Report.

Some lenders use your Credit Score to decide whether they should lend you money and how much interest they should charge.

There are 3 main Credit Reporting Bodies (CRBs) in Australia; Equifax (formerly Veda), Experian and Dun & Bradstreet. You may have more than one credit score as each CRB, and some lenders, calculate their own score based on the information they hold on you.

How are Credit Scores Calculated?

Your Credit Score is calculated from patterns in your credit history, characteristics of your credit profile, and aspects of your credit applications. Each reporting body will have their own methods for calculating your score.

Sometimes a Credit Scorecard is used which awards or deducts points based on age, residential status, marital status, children, employment status and current accounts.

Having too many accounts, too many enquiries or rejections, bad repayment history, defaults, court judgements or bankruptcy are all key reasons for having a low score.

What is a Good Credit Score?

Credit scores usually range from 0 to 1,000 or sometimes 0 to 1,200. The following provides an example of Credit Scores and their meaning.

  • Excellent (800 to 1000) – highly unlikely to have any negative events reducing your credit score in the next 12 months
  • Very good (700 to 799) – unlikely to have a negative event in the next 12 months
  • Good (625 to 699) – less likely to experience a negative event on your credit report in the next year
  • Average (550 to 624) – likely to experience a negative event in the next year
  • Below average (0 to 549) – more likely to have a negative event listed on your credit report in the next year