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What Is a Credit Score

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Monthly repayment from

$910.72

Example interest rate

6.25 %
p.a.

Comparison rate3

7.64 %
p.a.

Total charges

$1,857.28

Total repayments

$21,857.28

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. Any calculations made by you using this calculator is intended as a guide only.

What Is a Credit Score

If you’re wondering what is a credit score, it is the number or rating lenders use to decide whether to give you a credit or loan. In Australia, the most popular agencies that offer credit score summaries and credit reports are illion, Equifax, and Experian.

At MoneyMe, we use credit scores, also called credit ratings or credit scoring, to calculate credit card and loan interest rates. In general, having an excellent score can give you access to more favourable credit cards, loans, and other financial options. But as an innovative finance solutions provider, we understand that some people have lower ratings due to reasons that are out of their control. For instance, individuals who are in a younger age bracket have lower credit scores simply because they haven’t spent enough time to build positive credit actions like making timely payments and doing sensible applications. For this reason, our approval process is done on a case-by-case basis. 

MoneyMe is not your usual lending company. As an innovative financial service company, we offer quick and easy loan and credit products to tech-savvy customers and businesses in Australia. Thanks to our advanced tech-driven platform, the application process is purely done online and takes less than 5 minutes. Once approved, the funds are immediately sent to your bank account.

What’s a good credit score?

Now that you have understood what is a credit score, the next step is to identify what is a good credit score in Australia? It’s important to mention that credit bureaus have their own way to calculate credit score, but in general, it ranges from zero to 1,000 or up to 1,200 in some agencies. Their rating is fairly simple and straightforward – the higher the score, the better. 

If you still wonder what is a good credit score, take a look at each credit score rating based on illion’s rating system. 

Perfect score of 1,000

Only around 3.5% of Australian borrowers belong to this exclusive group whose members are more likely in an older age bracket and have spent a lifetime building an excellent credit history through timely payments, sensible applications, and just the right amount of credit lines. 

If you’re part of this exclusive group, you’ll enjoy better credit and loan interest rates than your lower-rated peers. 

Excellent score (800–999)

Lenders performing a credit health check generally approve and offer borrowers who have this score with favourable rates because they have demonstrated their ability to pay their loans without delays. 

Very good (700–799)

Lenders performing an online credit check generally perceived credit scores between 700 and 799 as ‘very good’. While borrowers with this rating have no problem getting their applications approved, they may not enjoy the same excellent rates as individuals with higher credit scores. 

One way to improve your credit score is to limit the number of your credit applications. Remember, too many of these and you run the risk of having a lower credit rating. 

Average (500–699)

If you’re wondering what is a credit score that’s perceived to be the average, it’s anything between 500 and 699. Most lenders feel that this is an ‘acceptable’ level because it shows that you haven’t had any major credit mishaps like bankruptcies and defaults. 

But if you want to access better credit and loan rates, you need to improve your credit score by avoiding late payments and limiting the number of your credit applications. 

Fair (300–499) 

While this credit score level is below average, it often means borrowers don’t have major issues like bankruptcies. Usually, people who belong to this category are young people who are still in the process of building their credit history. 

Low (zero–299)

If you belong to this credit score bracket, you probably have negative data on your credit history like payment defaults and/or frequent late payments. Fortunately, you can improve your rating by paying your bills on time, avoiding making multiple credit applications, and waiting for any defaults to be cleared on your record (a process that usually takes up to five years).

What are the benefits of having a good credit score?

Borrowers are not just curious about ‘what is a credit score’, but also how it could give them a wide range of financial benefits, especially when it comes to saving money and getting access to favourable loans and lines of credit. 

Higher borrowing capacity. If lenders conduct an online credit check and find that you have a high credit score, chances are they’ll let you borrow more money because you have already demonstrated your ability to meet your repayments on time. 

Better negotiating power. In general, borrowers with a high credit score have more negotiating power than those with lower ratings, allowing them to access more favourable loans and credits. Nonetheless, your credit rating is just one of the few criteria lenders take into account when calculating the interest rates, so having a high credit score is not a 100% guaranty that you automatically get lower rates. 

Increased chance of loan or credit card approval. While lenders use different factors to determine your creditworthiness, having a higher credit score increases your chance of getting more favourable rates than your peers with lower ratings. 

Tips for improving your credit score

Whether you have a high or low credit score, there are things you can still do to improve your creditworthiness. If you want to know how to improve credit score and put yourself in a stronger financial position, read our tips below. 

Pay bills on time. Paying your bills on or before the due date is one way to create a good credit history because it demonstrates your ability to meet your financial obligations in a timely manner. But if you struggle with this one, why not consider setting up a direct debit from your bank account or automate your payment? This way, you don’t have to worry about getting caught up with late fees.

Limit your credit enquiries. Remember that every time you apply for a new credit, this enquiry stays on your credit. Thus, you don’t want to have too many credit enquiries in a short period, which many lenders interpret as an activity of someone struggling to get approved, even if in reality you are in a decent financial standing. To avoid this issue, only proceed with a credit card or loan application when you’re sure you are ready to apply.

Use the credit score finder and look for any inaccuracies. Find out your credit score from all major credit reporting agencies, namely, Experian, illion, and Equifax, and look for any irregularities. If you think that something is inaccurate, call them and ask for more about your record. 

Knowing what is a credit score, what a good rating is and its benefits, how to conduct a credit score check, and how to increase credit score is crucial in making financial decisions. 

As an innovative financial company, MoneyMe offers fast and flexible loans and lines of credit for auto financing, personal expenses, tuition fees, real estate, and even travel. With same-day approval and application process that’s completely done online, we eliminate the ‘friction’ and inefficiencies found in the traditional lending process. 

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What Is a Credit Score

Unbelievably easy finance when I needed it the most. A huge thank you from me and as a returning customer I know that I am getting a fair deal.

After 5 to 10 minutes of filling up my application, my loan has been approved and the money was in my bank account. I had a great experience that is why I'm giving them a 5-star rating. Excellent service. Thank you very much, MoneyMe.

Amazing through and through. MoneyMe helped me out when no one else would and they have been a delight to deal with. I 100% recommend their service. They're an absolute joy to deal with!

4.7/5

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Transparent and
simple pricing

Interest rate

6.25 %
p.a.
to 19.95 %
p.a.

Comparison rate*

7.64 %
p.a.
to 21.32 %
p.a.

Establishment fee

$295 for loans between $2,100 and $5,000

$395 for loans between $5,001 and $15,000

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

Monthly fee

$10.00

Loan terms

Minimum 1 year

Maximum 5 years

Early exit fees

None

*This comparison rate is based on an unsecured personal loan of $30,000 for a term of 5 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. A $495 establishment fee and $10 monthly fee applies.

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