Showing results for

How Is a Credit Score Calculated?

Personal loans for

Trusted by thousands of Australians

The Morning Show The Morning Show

Award winning lender

Award winning lender

Winner of Canstar's Innovation
Excellence Award 2022*

Winner of Canstar's Innovation Excellence Award 2022*

Estimate your

Find out how much your repayments and
interest rate could be with our calculator


Monthly repayment from


Example interest rate

9.20 %

Comparison rate*

10.58 %

Total charges


Total repayments


Disclaimer: This calculator provides an estimate only and a comparison rate based on the example information provided. Other fees, costs and charges are not included. This calculation is not an offer for credit. The amount you can borrow may vary once you complete a loan application and all the details relevant to our lending criteria are captured and verified. The interest rate for this product is variable and subject to change. Any calculations made by you using this calculator is intended as a guide only.

How is Credit Score Calculated

How is credit score calculated? 

This is a question that many of us may not fully know how to answer. Knowing how our credit score is calculated, however, is a practical bit of knowledge that goes a long way towards managing our finances. Not only does your credit score have an impact on making loan applications easier or on how much a credit provider is willing to lend you, but it also gives you a leg up in negotiating the interest rates and terms of any loan you may apply for.

We at MONEYME understand that getting started can be confusing. Given that your credit score can impact whether or not your loan application is successful, it’s important to answer the question ‘How is credit score calculated?’ and identify what you can do to improve it.

Below is some basic information regarding the topic that we at MONEYME believe will be greatly helpful to you.

Why is a credit score important?

Are you wondering, ‘What is a credit score?’ Your credit score is used by banks and other credit providers to assess your loan applications and determine your reliability as a borrower. Your score is calculated based on information from your credit report, which is itself created from data reported by a range of sources.

A credit report is a comprehensive document that contains your credit history. The set of data featured in your credit report includes the credit products you’ve held in the last two years, your repayment history, the number of credit card applications you have made, and more.

Your bank or credit provider may use the information in your credit report to see how you have handled your debts in the past. They will then assess your creditworthiness based on this information and estimate whether or not you can repay your loan.

With this in mind, your credit score can help determine not only whether or not a lender may approve a loan request but also how much you could borrow, what your interest rate will be, and what loan terms may be offered. 

A high credit score can give you negotiating power when discussing the interest rate and loan terms. As your credit score changes based on your financial behaviour, you may want to do a credit score check regularly to keep track of your progress or current score.

This is where the answer to ‘How is credit score calculated?’ comes in. Knowing your credit score before applying for a loan can help you gauge whether your loan will be approved or if you’ll need to improve your score before applying.

How is a credit score calculated?

Credit reporting agencies calculate credit score numbers based on the information in your credit report. A typical credit report includes information about each credit product you have held in the past two years (including credit limit, credit provider, opening and closing dates of the account, your repayment history, and more). If you have defaulted on your utility bills, loans, or credit cards, the provider may also report this to the credit reporting agency.

In the past, it was mainly information such as credit enquiries and default listings that were available on your credit record. Today, ‘How is credit score calculated?’ is answered differently. With the introduction of Comprehensive Credit Reporting (CCR), both positive and negative credit information is now recorded on your credit file, giving lenders a more comprehensive view of your credit information.

This information can include account open and close dates, credit types, account limits, and repayment history information (RHI) for the last twenty-four-month period. Your RHI status is displayed as a number indicating how many days in arrears your account has and in which specific months. The RHI status is also reported on your active account on an ongoing basis until it is repaid. 

Your credit report will also include any credit applications and credit report requests youve made. Any court judgements, personal insolvency agreements, bankruptcies, or debt agreements will also show up on the report if you have any recorded to your name by a creditor or lender. All of this information will be taken into account by the credit reporting body when they do your credit calculation.

Regarding ‘How is credit score calculated?’ there are three main credit reporting bodies responsible for calculating these scores in Australia: Experian, illion, and Equifax. Because credit score companies use slightly different algorithms to calculate credit scores, your credit score may be different depending on which credit reporting body calculated it.

What is a good credit score?

So how do you answer ‘What is a good credit score?’  in Australia?

Within each credit scoring agency, the higher the score, the better. As for the question ‘How is credit score calculated?’ both illion and Experian calculate credit scores between 0 and 1,000, while Equifax scores within a range of 0 and 1,200.

The three main credit reporting agencies in Australia rank their credit scores slightly differently, so to see what range (such as excellent, very good, average, fair, and below average) your specific credit score falls into, you’ll need to check with the particular credit reporting agency.

Your credit score changes over time, so if you’re thinking about how to improve credit score numbers on your report, there are several things you can do.

First of all, you must pay your utility bills by their due date and make all loan and credit card repayments on time. If you are unable to keep track of your repayments, you may even want to consider consolidating your debts for easier loan management. You may also hurt your credit score if you apply for too many loans.

So are there other ways of answering ‘How is credit score calculated?’ In a way, yes. Some lenders also use an internal credit scoring system when assessing your loan.

For example, MONEYME has a rating scale from A1+ to A5+ that is assigned to customers. If you’d like to know how to increase credit score numbers with MONEYME, one method is to make all your repayments on time. This will help improve your score for the next time you apply for a MONEYME loan and may even offer you a lower rate on a loan you desire.

The Australian Securities and Investments Commission’s MoneySmart website has more information about credit reports, how they are calculated, and how to improve them.

How to keep track of your credit score?

The good news is that credit reporting agencies are obliged to give you a copy of your consumer credit report for free every three months, giving you the freedom to answer ‘How is credit score calculated?’ when you need the information most. You can also contact the reporting bodies directly to request a credit report, though you may be asked to pay a fee if you’ve used up your free report requests. 

You should be able to access your credit report online within a couple of days, but it can take longer if you get it via email or regular mail. As you may have a credit file with more than one reporting agency, requesting a report from all three is ideal, as each agency may hold different information about you.

You may also use apps like MONEYME’s Credit Score tool to review your credit score without placing a request directly to these credit reporting agencies. Through this tool, not only will you be able to check your credit score within minutes, but you can do so for free. You’ll also have access to the same information that banks and lenders use to evaluate your creditworthiness, as well as tips and tricks to improve your score.

It’s worth doing a credit score check regularly, as a good credit score can help you not only with negotiating a loan but with other opportunities as well, such as housing or asset acquisition.

Our customers

How Is a Credit Score Calculated?

Fast, fair and easy. Very happy customer. Happy to get another loan in the future from MONEYME.

Simple process, easy to follow application, quick response time and good support.

I was impressed with how easy and quick the application was. Very happy with their customer service, and the app is very convenient.


Review Stars Out of 2,701 reviews

View more

Transparent and
simple pricing

Interest rate

9.20 %
to 25.20 %

Comparison rate*

10.58 %
to 26.58 %

Establishment fee
(Direct applications)

$395 for loans between $5,000 and $15,000

$495 for loans between $15,001 and $50,000

Monthly fee


Loan terms

Minimum 3 years

Maximum 5 years

Early exit fees


Ready to get

Won’t impact your credit score!
Won't impact your credit score!

Personal Loans are running hot!

55 people in the last 24 hours have applied

Freestyle is running hot!

55 people in the last 24 hours have applied

Debt Consolidation is running hot!

55 people in the last 24 hours have applied