How your credit score is calculated

Your credit score is a number that indicates what you’re like with borrowing money. But how is it worked out?  
 
Here are some of the factors in the mix.  

📆 Your history of making repayments 

If you make repayments on time, every time, then this will help to boost your credit score, by showing you’re reliable.  
 
But, the opposite is true, too. If you’re late with repayments—or miss them altogether—then this can lower your score.  
 
Other negative credit events that can do damage to your score include accounts with debt collectors, defaults, fraud listing, courts cases, and bankruptcy.

💵 Your debt 

Another factor that influences your credit score is your past and current debt—including how many credit accounts you have and what types of credit. 
 
For example, if you’ve successfully applied for a variety of products, such as a couple of credit cards, a mortgage, and a personal loan, then this can help your score. It might demonstrate you’re in control of your money.  

💳 Your applications for credit products

It’s not only your previous and current credit accounts that count. Any credit applications you’ve made, regardless of whether they were approved or not, will be listed on your credit file as “credit enquiries”.  
 
Making several credit applications in a short period of time can impact your credit score negatively. 

💁‍♀️ What doesn’t affect your credit score

Despite common misconceptions, your bank balance, sexual orientation, race, origins, beliefs, affiliations, lifestyle, and medical history have zero impact on your credit score.

🏢 Who works out your credit score?

In Australia, there are three main credit bureaus: Experian, Equifax, and illion. These credit bureaus collect and store credit reporting data from lenders and use this data to calculate your credit score.  
 
Your score might differ from one to the other. That’s because each bureau collects information independently and works out your score in its own way. 
 
If you check your credit score in the MONEYME app, you’ll see data from Equifax, Australia’s leading credit bureau that is used by most lenders. The highest possible score is 1,200.