What Is a Credit Score and Why It Matters in Australia

If you’ve ever applied for a credit card, a personal loan, or even a mobile phone plan in Australia, chances are your credit score played a role in the outcome. But what exactly is a credit score, and why does it matter so much?

What Is a Credit Score?

A credit score is a numerical representation of your creditworthiness. In Australia, it typically ranges between 0 and 1,200 (depending on the credit reporting agency). The higher the score, the more trustworthy you appear to lenders.

Major Credit Reporting Agencies in Australia

• Equifax (0–1,200 scale)
• Experian (0–1,000 scale)
• illion (0–1,000 scale)

Why Does Your Credit Score Matter?

Your credit score affects your ability to access loans, the interest rates you're offered, and even your chances of getting approved for a rental property or utility account.

Benefits of Having a Good Credit Score:

• Better loan and credit card approvals
• Lower interest rates
• Higher credit limits
• Stronger rental and employment applications

What Affects Your Credit Score?

Your score is calculated based on several factors:

• Payment history: Late or missed payments reduce your score.
• Credit inquiries: Too many applications in a short time may hurt your score.
• Types of credit: A mix of loan types can help build your score.
• Credit utilisation: Using too much of your credit limit can be a red flag.

How to Check Your Credit Score for Free

You can check your credit report for free once a year from these agencies:

• Equifax
• Experian
• illion

Key Takeaways

• Credit scores range from poor to excellent and influence your financial access.
• Maintaining good financial habits is essential to improving your score.
• Always monitor your credit report to avoid surprises.

Next Step

In our next article, we’ll show you how to improve your credit score in just 90 days. Stay tuned and subscribe to our newsletter!