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Young couple looking at laptop

What’s your credit score?

It’s a question that every adult should be able to answer. Those digits will determine how easy it is to acquire a personal loan, mortgage, and credit card, as well as what kind of rates you’re offered.

If you’re not sure, don’t worry, as you’re not alone.

In the following guide, we’ll take a closer look at credit scores in Australia, showing you how they work and answering questions such as:

What determines your credit score?

Your credit score is a number between 0 and 1,000 (1,200 for Equifax). It is calculated automatically and updated when new information is received.

The higher your score is, the easier it will be for you to acquire credit.

All the following factors contribute to your credit score:

  • How is my credit score calculated?
  • How can I check my credit score?
  • How do score ranges differ across credit reporting organisations?
  • How can I improve my score?
  • What does it mean to have bad credit?

Payment history

Your payment history is the most important part of your score. It covers all your previous repayments, missed payments, and defaults. It tells lenders how responsible you are and how likely you are to meet your obligations.

Credit utilisation

Lenders don’t really care about the total amount that you have borrowed. It’s all relative—what’s astronomical to one borrower could be infinitesimal to another. Instead, they focus on utilisation, which is the total credit available vs the total credit used.

So, if you have $5,000 worth of credit card debt but your total credit limit is over $50,000, you should be okay. Conversely, if your limit is just $500 and your debt is the same, your credit utilisation will be high.

Total number of accounts

You need some accounts to build a strong credit score, but if you have too many, it could work against you.

Length of credit history

It should go without saying that meeting your first monthly credit card payment is not the same as making that payment every month for 10 years. You’re 100% in both cases, but duration matters.

New applications

A new credit application can reduce your credit score, and opening many new accounts at once could leave a sizeable mark.

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Credit score ranges in Australia

You have more than one credit score, as your information is compiled and rated by more than one agency.

The information these agencies use to build their scores also varies, but not by much.

They all consider new accounts, missed payments, defaults, and credit utilisation, and if your score is terrible with one agency, it’s unlikely to be excellent with another (unless the first agency has made a mistake).

However, there can be some notable variations.

Credit Score Range  Equifax (0 to 1200) Experian (0 to 1000) Illion (0 to 1000)
Excellent 833 to 1200 800 to 1000 800 to 1000
Very Good 726 to 832 700 to 799 700 to 799
Average 622 to 725 625 to 699 500 to 699
Fair 510 to 621 550 to 624 300 to 499
Low 0 to 509 0 to 549 0 to 299

If you’re checking your credit score for the first time in years, it can be a daunting experience.

It’s like an ominously entitled email from your boss—you need to look, but you just can’t summon up the courage.

But a low credit score is not the end of the world, so take the plunge, check your score, and then take the necessary steps if it’s low.

The three major credit reporting agencies offer paid options where you can view your credit report/score and receive some other benefits (security alerts, notifications about changes, dark web scanning). By law, they are also required to grant access to your credit score once every 3 months.

You can request a free credit report using the links below:

We recommend checking all three of them for free to begin with. If you like any of the services provided and want to monitor your report closely, you can then consider the premium options.

Tips for improving your credit score

Your credit score is not set in stone. There are steps you can take to improve it, including:

  • Check the details: Is your credit report correct? Is all the information yours? If you notice an error and it’s adversely affecting your score, report it.
  • Meet payment obligations: Improving the payment history part of your credit score takes time, but it only takes one mistake to send it careering in the other direction. So, keep making those payments on time every month.
  • Pay down debt: You can improve your credit utilisation ratio by paying down more of your debt. Increase your monthly payment amount or add a one-off payment—every little helps!
  • Keep cleared accounts open: As credit utilisation focuses on available credit vs total debt, you need as much unused credit as you can get. If you clear a credit card, and it’s not charging you extortionate annual fees, keep it open.
  • Limit new accounts: Refrain from opening new accounts and be wary of any lender or service that will negatively impact your credit score.

Most of these tips take time and patience. Credit scores also update slowly, so you won’t necessarily see the results of your hard work in real-time.

But if you’re patient, you’ll reap the rewards in time.

The Bottom line

A low credit score isn’t the end of the world. Ume Loans was founded on the notion that bad things happen to good people and everyone deserves a second chance. So, if you find yourself with bad credit resulting from a missed payment, default, or another mistake, you can still get a bad credit loan with us.

However, a higher credit score will certainly make your life easier when it comes to making those big financial decisions.

So, check your score, keep these determining factors in mind, and do what you can to fix it. You might not see an immediate overnight improvement, but you’ll get there eventually.


Ready to take control of your financial future? Look no further! At Ume Loans, we specialise in providing solutions for individuals with less-than-perfect credit. Our dedicated team is here to help you secure the loan you need, tailored to your unique circumstances. Don’t let bad credit hold you back any longer—take the first step towards financial freedom and speak to our lending specialists on: (07) 5443 3863