Credit Score Guides — Check, Understand and Improve Your Score
This article provides general information only and does not constitute financial advice. For advice tailored to your situation, consult a licensed financial adviser. Learn more.
Contents
Your credit score is a numerical summary of your credit history. Lenders — banks, credit card providers, mortgage brokers, car finance companies — use it alongside other factors like income, employment and expenses to assess how likely you are to repay what you borrow.
Australia uses three credit reporting bureaus: Equifax, Experian and illion. Each maintains a separate credit file on you and calculates its own score. Lenders subscribe to one or more bureaus and will check your file with their preferred bureau when you apply for credit.
You’re entitled to a free copy of your credit report from each bureau once per year. You should check it before any significant credit application — particularly a home loan — and periodically to catch any errors or fraudulent entries.
How Credit Scores Work in Australia
Australia uses a Comprehensive Credit Reporting (CCR) framework, progressively introduced from 2018. Before CCR, credit files only contained negative information — defaults, court judgments and enquiries. Under CCR, lenders also share positive repayment data, meaning your file includes a rolling 24-month record of whether you’ve made minimum repayments on every credit account on time.
This means a clean repayment history actively improves your score — not just avoids damaging it.
What appears on your credit file
Credit enquiries (hard enquiries): Every time you apply for credit — a credit card, a car loan, a personal loan, a mortgage — the lender makes a hard enquiry on your credit file. This enquiry is recorded and remains on your file for 5 years.
Multiple enquiries in a short period signal to lenders that you may be struggling financially or applying for multiple products simultaneously. This can reduce your score and raise lender concern.
Repayment history: Under CCR, your lender reports monthly whether you’ve made the minimum repayment on each account. A consistent record of on-time payments is the single most important factor in building and maintaining a good credit score.
Defaults: A payment that is more than 60 days overdue and over $150 can be listed as a default. Defaults remain on your file for 5 years from the date of listing. A default significantly reduces your credit score and can prevent credit approval entirely with some lenders.
Serious credit infringements: Unpaid debts referred to a collection agency, court judgments for unpaid debts, bankruptcy, and personal insolvency agreements are the most serious items on a credit file. These remain for 5–7 years and have the largest negative impact on your score.
Current credit accounts: The number, type and credit limits of your current credit accounts are listed. High total credit limits relative to income can reduce your score even if you have no balance — because from a lender’s perspective, you have the capacity to draw down that credit.
Credit Score Ranges in Australia
Score ranges differ between bureaus. Equifax uses a 0–1,200 scale; Experian uses 0–1,000; illion uses 0–1,000.
Equifax score bands
| Band | Score range | What it means |
|---|---|---|
| Excellent | 853–1,200 | Very low risk; likely to access best rates |
| Very good | 735–852 | Low risk; strong approval likelihood |
| Good | 661–734 | Average risk; most lenders will consider |
| Average | 460–660 | Some risk; may face higher rates or stricter conditions |
| Below average | 0–459 | Higher risk; some lenders may decline |
Experian score bands
| Band | Score range |
|---|---|
| Excellent | 800–1,000 |
| Very good | 700–799 |
| Good | 625–699 |
| Fair | 550–624 |
| Poor | 0–549 |
illion score bands
| Band | Score range |
|---|---|
| Excellent | 800–1,000 |
| Great | 700–799 |
| Good | 500–699 |
| Room for improvement | 300–499 |
| Low | 0–299 |
Your score at each bureau may differ because not all lenders report to all three bureaus.
What Affects Your Credit Score
Positive factors (improve your score)
On-time repayments — the most important factor. Under CCR, your payment history on every credit account is reported monthly. A 24-month record of clean, on-time minimum repayments has the largest positive impact on your score. Even one missed payment can reduce your score significantly.
Low credit utilisation. Credit utilisation is the proportion of your available credit that you’re using. Using $2,000 of a $10,000 credit limit (20%) is better than using $8,000 of a $10,000 limit (80%). Lower utilisation signals financial stability. As a general guide, staying below 30% of your limit is considered positive.
Long credit history. Older accounts with a clean history contribute positively. Closing a long-standing credit card — even if you don’t use it — can reduce your score by shortening your average account age.
Diverse credit types. Having a mix of credit products (mortgage, credit card, personal loan — all in good standing) can positively affect your score. This is a minor factor compared to repayment history.
Negative factors (reduce your score)
Missed or late repayments. Even a single missed minimum payment can reduce your score materially. Set up automatic minimum repayments on all accounts to prevent this.
Defaults. A debt listed as a default (over 60 days overdue, over $150) has a significant negative impact and remains on your file for 5 years.
Multiple credit applications in a short period. Each application creates a hard enquiry. Multiple enquiries in a few months signal that you may be desperate for credit or have been rejected elsewhere. Avoid applying for multiple credit products within the same 3–6 month period if possible.
High credit card balances relative to limits. High utilisation suggests financial stress and reduces your score. Paying down balances before applying for significant credit is a sensible preparation step.
Court judgments and insolvency. These are the most serious negative entries and remain for 5–7 years.
How to Check Your Credit Score for Free
Checking with each bureau
Equifax: Visit equifax.com.au. Free annual credit report available; paid subscription for continuous monitoring. CreditSavvy (creditSavvy.com.au) provides a free Equifax score with regular updates.
Experian: Visit experian.com.au. Free annual credit report available online.
illion: Visit creditcheck.illion.com.au. Free annual credit report. Credit Simple (creditsimple.com.au) provides a free illion score with regular updates.
Using third-party monitoring services
CreditSavvy (powered by Equifax) — free score updates and alerts; score updated every 30 days.
Credit Simple (powered by illion) — free score updates; marketing offers displayed (the revenue model for the free service).
Many bank apps — CommBank, NAB, ANZ and others now display a credit score for their customers within the banking app, typically powered by Equifax.
When to check your score
Check your credit report at minimum annually, and specifically:
- 3–6 months before applying for a home loan, to allow time to address any issues
- After any identity theft or security breach involving your personal data
- If you’ve been rejected for credit unexpectedly
- Before applying for any significant credit product
How to Improve Your Credit Score
Step 1: Find and fix errors
Errors on credit files are more common than many people expect. You may find incorrect defaults, accounts that don’t belong to you, incorrect personal details, or repayment histories that don’t match your records.
Each bureau has a dispute process. Lodge a dispute directly with the bureau — provide your credit file, identify the incorrect entry, and provide supporting documentation (bank statements, correspondence with the lender). The bureau has 30 days to investigate and correct genuine errors.
If you dispute an entry with the bureau and it isn’t resolved to your satisfaction, you can complain to the Australian Financial Complaints Authority (AFCA).
Step 2: Set up automatic minimum repayments
The single most impactful thing you can do to protect and improve your credit score. Set automatic minimum repayments on every credit account — credit cards, personal loans, car loans, BNPL accounts — so that minimum payments are never missed due to forgetfulness or cash flow timing.
This does not prevent you from paying more than the minimum manually; it simply ensures the minimum is always met.
Step 3: Reduce credit card balances
If your credit card balances are high relative to your limits, paying them down improves your utilisation ratio — one of the main factors in your score. If you have a credit card at or near its limit, paying it down to below 30% of the limit can produce a measurable score improvement within 1–2 monthly reporting cycles.
Step 4: Avoid unnecessary credit applications
Every hard enquiry stays on your file for 5 years. In the lead-up to a major credit application (particularly a home loan), avoid applying for new credit cards, car finance or personal loans. Wait until after the mortgage is approved.
If you need to compare mortgage rates, note that multiple home loan enquiries within a short period (typically 14–30 days) may be counted as a single enquiry by some bureaus when it’s clear you’re shopping around — but this varies.
Step 5: Allow time
A default remains on your file for 5 years from the date of listing. A court judgment remains for 5 years. Bankruptcy remains for 5 years from the date of discharge.
You cannot remove accurate negative information before its expiry date. But as time passes, the impact of negative entries diminishes — particularly as positive repayment history accumulates alongside them.
Step 6: Close unused accounts strategically
Closing accounts can raise or lower your score depending on how it affects your utilisation ratio and average account age. As a general rule:
- Closing a recently opened account with no balance has minimal impact
- Closing a very old account reduces your average account age (slightly negative)
- Closing a credit card reduces your total available credit limit, which can increase your utilisation ratio if you have balances on other cards
Be thoughtful about which accounts you close, particularly before a home loan application.
Credit Scores and Home Loan Applications
Australian mortgage lenders typically don’t have a hard minimum credit score — instead, they assess the credit file holistically alongside income, expenses, employment stability and LVR. However:
- A default on your credit file within the past 5 years will significantly restrict your lender options (specialist lenders rather than mainstream banks, higher rates)
- Multiple recent hard enquiries may raise questions
- A strong, clean credit file with 24 months of on-time repayments typically qualifies you for the best available mortgage rates
Some lenders have specific policies around recent credit enquiries — for example, some may decline applicants who have made more than a certain number of enquiries in the past 6 months regardless of the overall file quality.
Frequently Asked Questions
Does checking my own credit score hurt my score? No. Checking your own credit file is a “soft enquiry” and does not appear on your file or affect your score. Only hard enquiries (by lenders when you apply for credit) affect your score.
How long does a default stay on my credit file? 5 years from the date it was listed. You can pay the default (which may be recorded as “paid” or “settled” on the file), but the entry itself remains for 5 years regardless.
Can I get my credit score to improve quickly? The fastest legitimate improvements come from correcting errors and paying down high credit card balances. Systematic on-time repayments improve your score gradually over months. There’s no shortcut — companies that claim to “fix” your credit quickly are typically deceptive.
What is a good credit score for a home loan in Australia? There is no universal threshold — each lender has its own policies. A score in the “good” or above range (660+ on Equifax) combined with a clean file, stable income and adequate deposit gives you access to mainstream lenders and competitive rates. Below this, you may face restricted lender choices and higher rates.
Guides in This Section
- Credit Score Australia — How It Works
- What Is a Good Credit Score in Australia?
- How to Improve Your Credit Score
- How to Check Your Credit Score for Free
For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.