Credit scores are an indicator of how you manage your money and repay your debt, based on personal and financial information kept in your credit record. When you apply for credit or a loan, lenders use credit scores to determine whether to approve your application or to lend you money. Knowing your credit score can help you negotiate better credit deals or understand why a credit application may have been declined. If you’re unsure what your credit score is, or how to access your credit report, here’s a helpful guide.

What is a credit report?

A credit report is a record of your credit history that a credit reporting agency produces using personal and financial information supplied by credit providers and other sources. If you’ve ever applied for or received credit, you’ll have a credit report.

A credit report includes:

• Your personal information - your name, gender, date of birth, driver’s license number, employer, current and previous address.
• Your credit score (credit rating) - the 'band' your credit score sits in (for example, low, fair, good, very good, excellent).
• Credit products you’ve had in the past two years – including credit cards, store cards, home loans, personal loans, and business loans.
• Your repayment history – details like the repayment amount, when payments were due, how often you paid and if you paid by the due date, missed payments (not made within 14 days of the due date), and when you made them.
• Financial hardship information.
• Defaults on credit cards, loans, or utility bills as well as bankruptcy and debt agreements.
• Credit report requests.

How can you see your credit report?

In Australia, there are three main credit reporting agencies: Equifax, Experian and illion. You can apply for a free copy of your credit report every three months from one of these by visiting their websites. You can also request a free copy if you’ve been refused credit in the previous three months.

As each agency holds different information about you, you may need to request your credit report from all three agencies to get a full picture of your credit worthiness.

Australia’s credit reporting agencies are:

Experian 1300 783 684

illion 132 333

Equifax 138 332

How is your credit score calculated?

Based on the information in your credit report, each credit agency uses its own algorithm to determine your credit score or credit rating. The higher the score, the better for you as that means lenders can consider you less risky. And that could make a difference to the interest rate you get or to the amount the lender will lend to you.

There are several things that impact your credit score but the most important of these is repaying your debt on time. Missing repayments or making late repayments will negatively affect your credit score. So too does applying for credit too often. The good news is, it is possible to positively influence your credit score, by making regular repayments, managing your finances carefully so you don’t miss repayments, and only applying for credit when you absolutely need it. 

How do you fix mistakes in your credit report?

Once you have a copy of your credit report, check that all the debt listed is yours and that your personal details are correct. If you find an error or any out of date information, contact the credit reporting agency to request an amendment.

For low credit scores or black marks that could impact your ability to access future credit, work at repairing your credit report. Regularly checking your credit report and working at repairing any issues – such as defaults or late repayments – will improve your credit score over time.

Why is your credit score so important?

Because lenders use your credit score to determine your credit-worthiness, and whether to lend to you or to provide you with credit, having a good credit score is important. It could mean the difference between being approved with a competitive interest rate, or being declined entirely.

If you’re feeling overwhelmed by the amount of debt you’re carrying, it’s vital you get financial advice as soon as possible to avoid getting into a situation where you are unable to make repayments, which will ultimately affect your credit score and your ability to access credit.

For helping getting your finances back on track with financial advice that’s tailored to your circumstances and situation, get in touch with a Mortgage Express broker.

While all care has been taken in the preparation of this publication, no warranty is given as to the accuracy of the information and no responsibility is taken by Finservice Pty Ltd (Mortgage Express) for any errors or omissions. This publication does not constitute personalised financial advice. It may not be relevant to individual circumstances. Nothing in this publication is, or should be taken as, an offer, invitation, or recommendation to buy, sell, or retain any investment in or make any deposit with any person. You should seek professional advice before taking any action in relation to the matters dealt within this publication. A Disclosure Statement is available on request and free of charge.

Finservice Pty Ltd (Mortgage Express) is authorised as a corporate credit representative (Corporate Credit Representative Number 397386) to engage in credit activities on behalf of BLSSA Pty Ltd (Australian Credit Licence number 391237) ACN 123 600 000 | Full member of MFAA | Member of Australian Financial Complaints Authority (AFCA) | Member of Choice Aggregation Services.