What is a credit score?
So first things first, what is a credit score?
Your credit score is a number between 0 and 1,000 that determines how credit-worthy you are. It's one of the factors that lenders use when deciding whether to lend you money and a good indicator of your financial health.
It basically takes into account your financial history and helps lenders determine your borrowing power, so it's vital you take steps to ensure that your credit score is as healthy as possible.
Your Finder credit score is provided by Experian, one of the 3 major credit reporting bureaus in Australia.
How do credit scores work?
You might have noticed that you may get a credit check if you apply for a home loan, credit card or even a new mobile phone plan!
When you apply for most types of credit in Australia, your lender will check your credit score and might request a copy of your credit report.
This score will tell them how strong your credit history is, which is an indicator of how trustworthy and reliable you are when it comes to loans and credit.
What are credit scores used for in Australia?
Generally, a credit score is used by lenders to understand how reliable you will be in paying back credit. There are a few main areas where your credit score is taken into account for lending and money applications.
- Taking out a loan from a bank
- How much banks are willing to lend you for a home loan
- What interest rates to charge you
- Whether you're eligible for a car loan, personal loan or credit card
- Signing up for a new mobile plan
- Setting up an account with an electricity or Internet service provider
- Getting a new credit card and what your limit should be on it
- Buying a car through dealership finance
What credit score should you aim for?
The higher your credit score, the better your chances of getting a loan or credit card. When it comes to your Finder credit score, any score of 625 or higher is considered a "good" credit score.
It's important you take steps to improve your credit score where you can, especially if you have a poor credit score.
Finder credit score ranges
| Experian credit score rating | Experian credit score range |
|---|---|
| Excellent | 800-1000 |
| Very good | 700-799 |
| Good | 625-699 |
| Average | 550-624 |
| Below average | 0-549 |
What's the difference between a credit score and a credit report?
Your credit score is the number that helps lenders decide how much you can borrow, while your credit report contains all the details of how that score was decided on.
It's a good idea to check both your credit score and your credit report. You can check your full credit report and score by visiting the credit score tab on your member dashboard.
What appears on my credit report?
- Your personal details (name, date of birth, employment history and length of time at your home address)
- The type and amount of credit you have applied for in the past (including the credit provider, product, opening and closing dates and the credit limit)
- The number of credit applications you've made
- Your repayment history on credit accounts (showing if you've paid on time)
- Overdue accounts
- Information regarding any court judgments or bankruptcy
More resources on Finder
More guides on Finder
-
Credit Repair Australia
Credit Repair Australia can help you sort out your credit score and improve your chances of getting a loan or credit card.
-
Mobile phone plans and credit checks
Missing a phone bill can end up hurting your credit score, but simply having a mobile plan won't impact your credit report.
-
What is a good credit score?
The average Australian has a "very good" credit score according to Finder analysis. Here's how credit scores are categorised in Australia, and how to check yours.
-
Credit reporting agencies in Australia
Credit reporting bureaus issue credit reports and scores to consumers and lenders. Discover how they work in this guide.
-
How to request a credit ban in Australia
Placing a ban on your credit report can help to protect you from fraud. Here's how to request and extend bans with Experian, Equifax and ilion in Australia.
-
Will cancelling a credit card affect my credit score?
If you're planning to cancel a credit card, here's what you need to know about the impact it could have on your credit score.
-
How to improve your credit score?
9 things you can do today to start improving your credit score.
-
Credit repair in Australia
How to remove incorrect negative listings from your report and adopt positive money habits to get your credit history back on track.
-
How long do credit enquiries stay on your credit file?
How to remove enquiries from your report in 4 steps and a guide for improving your credit score.
-
How to improve your credit score with a credit card
Discover how you can use a credit card to build or repair your credit history.
Ask a question
If I apply to be a joint cardholder for a card that allows joint primary holders, after my partner is accepted first, does the company check my credit score the same as for an individual applicant? Asking because If I apply for a 0% Balance Transfer card (It really needs to be 0%) then also apply to be a joint cardholder of a card which my partner has acquired, (to enable balance transfer from partner’s account to the 0% card), it may jeopardise being accepted as a joint holder of the partner account?.
Hi CC,
When you apply for a joint credit card, the lender will consider the credit scores of both applicants. It sounds like you may need some help managing your credit card debt – a great place to get free, confidential help is the National Debt Helpline. You can call them on 1800 007 007 or visit their website. Their professional financial counsellors provide free and confidential advice and might be able to help you sort out your credit card issues.
Best of luck!
Hi! My partner and I want to consolidate some small debts and upcoming one-off expenses into a balance transfer card which we will pay off within the 0% time frame. I am currently the better earner and would be the one to apply. However my partner is the holder of the current small cards which we want to transfer from. So that won’t work. Only way I can see is for me to apply for a small straightforward card first to use for paying the expenses then immediately apply for the balance transfer card we want (even if transferring cash for a day or two and time it for minimal charges). But how would the two consecutive applications on my credit score be treated by the second (main) balance transfer company? Would it be a guaranteed rejection? Or not an issue?
Hi CC, We have a detailed guide to making a balance transfer to someone else which covers this in more depth. Broadly speaking, the most likely scenario is that you would apply for a balance transfer yourself, but make sure the card you choose allows the transfer of someone else’s debt – that’s the most common scenario and also means you’re not making multiple applications. To do this, compare balance transfer offers, find one that appeals and then contact the provider to see if they will accept transfers from someone else. Good luck!
My score is 804. What are the chances of approval if I refinance my loan to a larger lum sum and reconsolidate my current loan.
Hi Sukit,
Lenders consider a number of factors, including your income, debt levels, credit card limits, employment history and more. However you have a strong credit rating which should support your loan application.
Hope this helps1