Your Credit History explained.

What is a credit score?

Your credit score (also known as Equifax Score) is a number calculated from information in your credit report provided by Equifax.  This information includes the number of credit enquiries you have made to financial institutions, the number of defaults or court judgements listed and the age of your credit file.

Why is my credit score so important?

In Australia, many lenders will use your credit score to determine whether you can borrow, how much you can borrower, and at what interest rate. 

What do I need to know?

Your score is dynamic and changes over time; depending on the nature of the loan and the volume of loans you apply for.  Equifax Score falls between a range between 0 and 1200.  The higher your score, the better your credit profile.  This means that you will be more likely to be approved by a lender for a loan than someone with a low score.  You may also attract a better interest rate.

What is the difference between Credit scores?

Excellent (851 - 1200) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is highly unlikely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Equifax’s credit bureau. In other words, the odds of no adverse events occurring on your credit file in the next 12 months are more than 5 times better than the average population odds.

Very Good (751 – 850) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is unlikely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Equifax’s credit bureau. In other words, the odds of no adverse events occurring on your credit file in the next 12 months are more than 2 times better than the average population odds.

Good (651 – 750) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is less likely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Equifax’s credit bureau. In other words, the odds of no adverse events occurring on your credit file in the next 12 months are better than the average population odds.

Fair (551 - 650) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is likely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Equifax’s credit bureau.

Below Average (450 - 550) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is more likely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Equifax’s credit bureau.

Poor  (0 - 450) - Based on history, scores in this category indicate that an adverse event such as a default, court judgement, personal insolvency or similar, is highly likely to be recorded on a credit file in the next 12 months when compared to the average credit active Australian population as recorded on Equifax’s credit bureau.

What should I do to improve my score?