A credit score is a number that lenders and financial institutions use to gauge the risk of lending money to you based on your past credit behaviour. It helps them determine if you are eligible for loans and other financial products.
Now, you may be asking questions such as, “How can I check my credit score in Australia?” “How can I check my credit score for free?” and “How do I check my credit score myself?” Below, Freedom Loans provides answers to these questions by discussing how to check your credit score in Australia, including what makes a good credit score.
How Do I Check My Credit Score?
Checking credit scores in Australia is relatively straightforward. You can do it yourself by either requesting your credit report directly from one of the credit reporting agencies or using online credit score providers.
Credit Reporting Agencies
Three main credit reporting bodies operate in Australia: Equifax, Experian, and illion. By law, these agencies must give you access to your credit report for free once every three months. This means you can request a free copy of your credit report from each of these agencies once every quarter.
The best way to check all three credit scores from Equifax, Experian, and illion is to visit their websites. Look for the section where you can request your free credit report. You’ll need to provide personal details like your name, date of birth, and address, as well as any additional information required for identity verification, such as your driver’s licence number. Once your identity is confirmed, you’ll receive your credit report either online or via mail, depending on your preference and the agency’s procedures.
Aside from your credit score, your credit report will include other essential details, such as your personal information, credit products, repayment history, defaults, and credit applications.
By regularly obtaining your credit reports from all three credit reporting agencies, you’ll get a comprehensive, accurate, and up-to-date view of your credit history and scores. This will help you spot any discrepancies or issues that may be affecting your creditworthiness. It’s essential to be mindful of how often you check, though, as hard inquiries – formal requests for your credit report by lenders – may impact your score.
Online Credit Score Providers
Alternatively, you can use online credit score providers. However, make sure they’re reputable and offer free access to your credit score without hidden charges.
Start by choosing a trustworthy online credit score provider – look for providers with positive reviews and a secure website to ensure that your personal information is safe. Next, on your chosen provider’s website, find the section dedicated to checking your credit score – this might be labelled “Check Your Credit Score” or something similar. You’ll then need to verify your identity by providing personal information, which typically includes your full name, birth date, residential address, and possibly other details like your driver’s licence number.
After submitting your information, the online credit score provider will process your request. Depending on the provider, you may receive your credit score instantly or within a few minutes.
Some Important Reminders
Keep in mind that by using an online credit score provider, you may agree to their privacy policy, which could allow them to use your personal information for marketing purposes. You usually have the option to opt out of this after signing up.
Also, be cautious of any online credit score provider that asks you to pay or provide credit card details. Checking your credit score should typically be free through these providers.
What’s a Good Credit Score in Australia?
Credit scores normally range from 0 to 1200 or 0 to 1000. Different credit reporting agencies have their own credit rating bands. For example, on the Equifax scale, a credit score above 853 is considered excellent, while on the Experian scale, a score above 800 is excellent.
The higher your score, the better your creditworthiness is considered to be. This means you’re more likely to be approved for credit and may be offered more favourable interest rates and loan or credit card terms.
On the other hand, a number below 500 is typically considered a bad credit score based on the scale used by major credit reporting agencies like Equifax and Experian. If your score falls into this range, lenders may view you as a higher risk, which could result in stricter loan conditions or higher interest rates.
While each lender has its criteria, generally, a score above 600 is needed to be viewed more favourably and to have a better chance of securing a home loan with reasonable terms. Maintaining a score below this threshold indicates financial behaviour that may need improvement to enhance loan eligibility.
Your credit score is determined using various factors, including:
- Payment History: Your payment activity, including whether you’ve made your credit card and loan repayments on time and in full.
- Credit Utilisation: The amount of credit you’re using compared to the total amount available to you.
- Length of Credit History: How long you’ve been using credit products and managing your debts.
- Credit Inquiries: How many times you’ve applied for a credit check recently.
- Types of Credit: The variety of credit products you have, such as credit cards, personal loans, and mortgages.
Final Thoughts
Understanding how credit scores work helps you take control of your financial future. With this knowledge, you can manage your money wisely and make informed decisions when borrowing. Make sure to regularly monitor your credit report and take steps to address any errors or discrepancies. This way, you can improve your creditworthiness over time, thus enhancing your chances of accessing credit and financial opportunities in the future.
Need assistance or advice regarding your credit score? Contact Freedom Loans today and get personalised guidance from our financial experts.
1300 364 751