Your credit score

When you apply for credit in Australia, the credit provider will usually ask for your permission to obtain and access the information on your credit report. The information helps them determine how you manage repaying other credit obligations and process a decision to approve your application.

Your Experian credit score is a snapshot of the strengths and weaknesses in your Experian credit report. The score gives you an idea of how credit providers may view your credit report and the information contained in it when assessing your application for credit. 

Your Experian credit score can range from between zero and 1000, with a higher score signalling a healthier credit history. A higher score could indicate that you have a history of managing your credit sensibly and making repayments on time.

Credit score

How your Experian Credit Score is calculated

Your Experian credit score is calculated using a statistical algorithm that collects past events to predict future behaviour. Each credit reporting bureau uses a slightly different algorithm and does not disclose in detail how this is calculated.
There are key attributes that are used to generate your Experian credit score:

  • The type of credit provider that has made enquiries on your Experian credit report
  • The type of credit product you have applied for
  • Your repayment history
  • The credit limit of each of your consumer credit products
  • The number of credit enquiries and any negative events, such as defaults or bankruptcies

You can check your credit score by ordering a copy of your Experian credit report. You may obtain a free report once every three months. 

Score   What this means
800 - 1,000 Excellent This indicates an excellent Experian Credit Score and is well above the average.
700 - 799 Very good This indicates a very good Experian Credit Score and is above the average.
625 - 699 Good This indicated a good Experian Credit Score and is in the average.
550 - 624 Fair This indicates a fair Experian Credit Score.
0 - 549 Below average This indicates a below average Experian Credit Score and is likely to be considered a poor credit score by a credit provider.

Your credit score isn’t set in stone – it’s dynamic that can change with certain kinds of financial behaviour. It can go up or down over time, so it’s important to regularly check your credit report.

Which factors impact my Experian Credit Score?

Your Experian credit score is calculated by taking into consideration several financial and behavioural factors such as your credit history, repayments and credit type, amongst others. The main factors that impact your credit score include:

Payment History (High Impact)

Making regular payments will have a positive impact on your credit score. Missing payments may have a negative impact on your credit score.

Age of the Credit (Medium Impact)

A long credit history in which you have made payments on-time works favourably for your credit score. It gives lenders such as banks and non-banking lenders insight into your repayment pattern over the course of time. It reflects your experience in handling credit and can influence credit providers’ confidence.

Total Types of Account (Low Impact)

It is ok to have a balance of secured as well as unsecured loans in your credit history, provided you make payments on time. Showing you can consistently keep up with substantial payments, such as a monthly mortgage can favourably impact your score.
A home loan or mortgage is an example of a secured loan while a credit card is an unsecured loan. A mixed credit portfolio helps boost your credit score.

Number of Hard Enquiries

Every time you apply for credit, the credit provider will reference your credit report which will trigger a hard enquiry. Multiple enquiries in a short timeframe may raise a red flag to lenders and they could be reluctant to offer you credit. Credit providers may see multiple enquiries in rapid succession as a sign of financial difficulty.

What could negatively impact on your Experian Credit Score

There are a few things that could have a negative impact on your Experian Credit Score:Making multiple credit applications in a short space of time. Credit providers may view multiple enquiries in rapid succession as a sign of financial difficulty

  • Missing payment dates on your credit account(s). Credit providers may view missed payments as a sign of financial difficulty
  • Having large values of unsecured credit available
  • Adverse events that appear on your credit file, such as a default, bankruptcy or court judgment related to credit. Credit providers may consider the age, value, and number of adverse event(s) on your credit account(s)
  • Outstanding accounts with debt purchase organisations. Credit providers could potentially sell long term outstanding debt to a debt collector, who may then report the account to credit bureaus
  • Applying for or accessing short term credit. This may include using organisations that offer fast loans at high interest rates

Does my Experian credit score change?

Your Experian credit score is re-calculated when it is requested by you, the individual, and will change when new information is added, removed, has aged or drops off due to length of time. Your Experian credit score may not always change when the data has changed.

It is worthwhile noting that a variation in your score of plus or minus 10 points or less is expected, and typically nothing to be concerned with.

Improving your Experian credit score

Improving your Experian credit score takes time and careful management. Here are some key tips to improve your credit score:

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Make payments reliably

Look after your future Experian Credit Score now by diligently making mortgage, loan and credit card repayments when they’re due. If you do fall behind on a repayment, catch up within 14 days so you won’t be reported as being in arrears (this is known as a ‘grace period’).

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Avoid multiple late payments

Consecutive late payments and paying bills significantly late to the point where debt collection agencies are engaged can negatively impact your credit score.

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Avoid negative entries on your credit report

Defaults, certain court judgements, open accounts with debt collection agencies and excessive credit enquiries may have a negative impact on your Experian Credit Score so it’s best to avoid them.

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Regularly check your credit report

As new data is factored into Experian credit reports, now is an even better time to regularly check the information on your credit file to make sure it’s correct.