Australia has three main credit bureaus: Equifax, Experian, and illion. Each holds a credit file on you and calculates its own score. Your score can differ between bureaus because lenders do not always report to all three. Most banks and mortgage lenders use Equifax.
Australia uses comprehensive credit reporting (CCR), which means your credit file includes positive information - such as on-time repayments - alongside negative information. This is worth knowing because consistent, timely payments actively help your score, not just the absence of bad marks.
Score ranges differ between bureaus, but as a general guide, on the Equifax scale a score above 800 is considered excellent, 625 to 799 is good, 550 to 624 is average, and below 550 raises concerns for most lenders.
The main factors that reduce your credit score are: defaults (missed payments reported by a lender), court judgments, bankruptcy, and credit applications. Every time you apply for credit - whether a credit card, car loan, or home loan - an inquiry is added to your file. Multiple inquiries in a short period is a red flag for lenders.
The main factors that improve your score over time are: paying all bills and repayments on time, keeping credit card balances low relative to the limit, maintaining older accounts in good standing, and avoiding unnecessary credit applications.
Paying a default or overdue account will not remove the listing from your file - it will be updated to show as paid, which is better, but the listing remains for five years from the date it was first reported.
A credit score is a starting point, not a final verdict. Lenders look at the detail behind the score. A single default from three years ago on a phone bill is treated very differently to a default on a home loan from 12 months ago. Context matters.
Lenders also look at your full credit file - not just the score - as well as your income, employment stability, deposit size, and the nature of any adverse listings. Some lenders specialise in borrowers with impaired credit and assess applications with more nuance than a major bank's automated system would allow.
You can check your credit score for free at any time through Equifax, Experian, or illion's websites. Checking your own score does not affect it. It is worth checking your file before applying for a home loan to identify any errors or old listings that may be affecting your score.
If you find incorrect information on your file, you can dispute it with the relevant bureau. Errors are more common than people realise and can often be corrected. A broker can help you understand what your credit file means for your home loan application and which lenders are most likely to approve you.
Jason and Steve are Adelaide mortgage brokers who give honest advice at no cost to you. We look at your full picture - not just your score.
The information on this page is general in nature and does not constitute financial advice. Given Finance Pty Ltd (t/a Lendology) ACN 624 144 501 is authorised under LMG Broker Services Pty Ltd ACL 517192.