Most people talk about “my credit score” as if it’s one fixed number. It isn’t. Knowing how the number works makes a lot of finance decisions easier. For what to do about yours, see how to improve your credit score.
Different lenders, different scores
Equifax, Experian and illion each hold their own file on you, and each offers more than one score version. Each lender picks one, and each score weights your file its own way. So you can have a poor score on one measure and a strong one on another, at the same time, from the same facts.
The score maybe 80% of lenders use might make finance expensive. Another of your scores could sit comfortably in the green, and one or two lenders might go off exactly that one. Knowing which is which is our job, and it changes your borrowing power.
Where scores start and end
A new credit file typically starts around 600. The maximum on most scales is 1200. A score doesn’t drift up on its own: it drops as enquiries rack up and climbs with on-time repayments.
Some lenders price by score. Most just set a minimum: clear it and the score stops being the issue. Either way, a better score only ever helps.
No credit isn’t good credit
No loans and no cards doesn’t mean a great score. With nothing on the file, the score just sits there, unproven. It climbs with credit that makes sense for you (not ten applications in a fortnight), repaid on time, every time. A mortgage, car loan, truck loan, business loan or credit card reports to the bureau every month, and every on-time payment nudges the score up.
Why buy-now-pay-later is all downside
Zip, Afterpay, Klarna and the rest make an enquiry on your file when you sign up, but don’t report your repayments. You wear the negative and get none of the positive a real loan or credit card would give you for the same good behaviour.
Your personal file is your business file
For business lending, lenders mainly go off the director’s personal credit file, not a separate business score. Paying the business loan on time doesn’t cover a late personal loan, a late mortgage, or a Zip or Cash Converters mark.
It runs both ways. How the business repays feeds your personal score too, which matters later when you want a mortgage of your own.
Which of your scores matters?
The number on a free credit app might not be the one that decides your deal. We can check what applies to your purchase without it costing you an enquiry. See shopping for finance without wrecking your credit file.
Common questions
What is a good credit score in Australia?
There’s no single cut-off, because each bureau uses its own scale, topping out at 1,000 on some and 1,200 on others. In general, the further above the middle you sit, the better.
Is 700 or 800 a good credit score?
Generally above average, but it depends on the scale. Out of 1,000 it’s a strong result; out of 1,200 it’s good, with room to climb.
How do I check my credit score?
Request your credit report free from Equifax, Experian and illion; most also show your score. Checking your own score isn’t a credit enquiry and won’t lower it.
Does your credit score reset?
No. Enquiries and most negative listings drop off after set periods, generally measured in years, and the score is recalculated from what remains.
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