What is a Good Credit Score in Australia?

A credit score is a number that determines your creditworthiness, or the likelihood that you will pay back any money that you borrow. It helps lenders to make informed lending decisions based on the risk of lending you more money.

The higher your score, the more reliable you’ll appear to lenders. A high credit score will make it easier to qualify for mortgages and car loans, start a business, and, in some cases, secure a job. A bad credit score can lead to lenders being reluctant to lend to you or charging you higher interest rates. and you might have to settle for loans with strict terms.

Striving for a good credit score is one of the most important financial goals to have. A bad credit score could be what stands in your way of you living your best life. If you plan to get a loan, you need to be aware of what is considered a good credit score and how you can attain it. In this article, we will try to answer these questions and also explain other important concepts of your credit score.

What factors influence your credit score?

Your credit score sums up the information on your credit report into one number, designed to represent your credit risk, or the likelihood that you will pay your bills on time. Credit scores are calculated using information in your credit report at that point in time. Here are some major factors that can affect your credit score:

● Loans or credit card repayment history.
● Your borrowing history.
● Past bankruptcies or defaults on your payments.
● Historical frequency and number of credit applications.
● Length or duration of your credit history.
● Hard enquiries on your credit report.

Credit reporting agencies follow the Comprehensive Credit Reporting (CCR) system in Australia, which means that both your positive and negative financial behaviors are reported in the credit report. This allows lenders to get a full picture of the borrower, disclosing not just negative attributes but also your positive financial behavior, such as repaying loan payments on time.

Who calculates your credit score?

There are three major credit reporting agencies (also known are credit reporting bureaus) in Australia – Equifax, Experian and Illion. They all use their own complicated algorithm, or calculation, to calculate your credit score, based on the information in your credit report at the time of calculation. Both your negative and positive credit-based behaviours are included in the calculation.

Each credit reporting agency can collect different information and has different ways of calculating your credit score, so it pays to check your credit score from each one. Depending on the agency, your credit score can range between zero and 1,000 or 1,200. A higher number in the range depicts higher credit worthiness and vice versa. The score range between zero and 1,200 is further divided into five credit ratings: low, fair, average, very good, and excellent, which means that your credit score will give you one of those ratings.

What is a good credit score in Australia?

A good credit score can be slightly different, depending on the credit reporting agency. Each agency uses different methods and rating scales to calculate and report your credit score, which is the reason why a good credit score is not fixed and varies from agency to agency. If you know your credit score, the table below will help you get an idea of your credit rating based on the credit score you have achieved.

Company NameLow (Credit Score Range)Fair (Credit Score Range)Average (Credit Score Range)Very Good (Credit Score Range)Excellent (Credit Score Range)
Equifax0 - 459460 - 660661 - 734735 - 852853 - 1200
Experian0 - 549550 - 624625 - 699700 - 799800 - 1,000
Illion1- 299300 - 499500 - 699700 - 799800 - 1,000

As a rule of thumb, if the credit reporting agency uses a scale from zero to 1,200, a good credit score would be above 661 while an excellent credit score would be above 853. For agencies using a scale between zero to 1,000, a credit score between 500 and 699 would fetch you a good credit rating. As a point of reference, the average credit rating in Australia is around 695, which is in the good range.

If you want to apply for a mortgage, you should aim to achieve a higher credit score to qualify for better terms. You might still qualify for a mortgage or other loans with low credit scores, but such loans may come with exorbitant interest rates and strict terms that can force you into a debt trap.

How can you improve your credit score?

There is always a room for improvement in your credit score unless you already have an excellent credit score. While improving your credit score is a long-term process and may take some time to show up on your credit report, these little steps can put you on track to increase your credit score.

● You should periodically review your credit report and scan them for inaccuracies. For example, some common mistakes that can appear on your credit report include duplicate debts, entries arising from fraudulent activities, omitted repayments, incorrect credit for someone else’s debt.
● To improve your credit score, you should avoid applying for new loans. When you apply for a loan, lenders usually run a hard check on your credit, which can show up on your credit report and reduce your score. Frequent applications within a short time span can signal that you are in financial trouble, which can reduce your chances of getting a loan at favorable rates.
● You should pay your existing debts and loans on time as timely repayments build your credit history and reduce your outstanding debt. With the introduction of the Comprehensive Credit Reporting (CCR) system, your positive financial behaviors such as timely payments show up on your credit reports, which can improve your score.
● You can also consider setting up automatic payments for paying off your utility bills. Bills valuing more than $150 and 60 days overdue are listed on your credit report as defaults, which remain on your report as default for up to five years.

Learn more about how you can fix credit score in our detail guide. 

How can you check your credit score?

If you have ever taken out a loan, your credit report would be available with credit reporting agencies. You can get a free copy of your credit report every three months from any of the credit reporting agencies. You need to provide the company with your personal information, such as name, date of birth, driver’s license number, and contact address for verification purposes. After verification, you should receive your report within 10 days. Alternatively, there are some online credit providers where you can also check your credit score instantly.  


Having a good credit score is essential to get access to different types of loans at better terms. Different credit reporting agencies assign you a rating based on their calculations and evaluating your credit history. You should aim to score above 600 to attain a good credit rating, and you can get there easily if you take those simple steps we discussed in the article.

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B M Peachey

B M Peachey, has over 15 years of experience investing in property and the stock market, in both New Zealand and Australia. She has a post-graduate degree, with qualifications in Finance and Mortgage Broking and in Accounting and Bookkeeping. She is passionate about ensuring people have access to credible, reliable, and easy to understand information to help them get in control of the life they REALLY want to live.

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    Disclaimer: The information in this article is general in nature as it has been prepared without taking account of your specific objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser.