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What Is A Good Credit Score Australia?

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What Is A Good Credit Score Australia?



When discussing personal finances, one common query is, ‘What is a good credit score Australia-based lenders consider?’ and there’s no mystery as to why. 

In an era where our financial lives are mostly digital and governed by data, the significance of your credit score has never been greater. This number serves as a metric of your financial dependability, playing a pivotal role in sculpting your financial trajectory.

So, what is a good credit score Australia-wise, and why is it so important? This article will lift the veil on credit scores, exploring how your spending behaviours can influence them and delving into their effect on your capacity to borrow.



What do credit scores represent?

Before you find out the answer to ‘What is a good credit score Australia-wide?’ you may first be wondering, ‘What are credit scores?’ 

Credit scores are numerical values assigned by credit reporting bodies to represent an individual’s credit risk. It is a calculated expression of your creditworthiness that’s based on your past credit dealings, your applications for credit, and how good you’ve been at paying things back. 

Credit scores are a crucial part of your financial identity. They’re calculated by three major credit reporting bodies in Australia: illion, Equifax, and Experian. They’re the ones creating your credit report, crunching the numbers to figure out your credit score, and keeping all your financial details on file. 

In Australia, these scores range from 0 to 1,000 or 1,200, depending on the credit reporting agency. A higher score typically indicates lower risk, suggesting you’re more likely to responsibly manage and repay credit. Since it is a measure of your creditworthiness, the better your credit rating, the greater your chances of being offered higher credit limits and lower interest rates.

So what is a good credit score? Australia-based credit reporting agencies have different ways of rating credit scores. Equifax, for instance, considers credit scores of 661 and above to be good, 735 and above to be very good, and 853 and above to be excellent.

Additionally, lenders may have different criteria as to what credit scores they might consider good. It’s essential to remember that while a good credit score can open doors to better financial products, it doesn’t guarantee acceptance, as lenders also consider other factors like income and expenses.



How does my spending habit affect my credit scores?

Your spending habits can significantly impact your credit scores. Whenever you apply for a loan, credit card, or even a cell phone contract, the provider may run a credit check. These checks can leave a ‘hard enquiry’ on your credit report, which can lower your score. Therefore, frequently applying for new credit can negatively impact your score.

On the flip side, demonstrating responsible financial behaviour can improve your score. This includes paying your bills on time, keeping your credit utilisation low, and maintaining a long history of good credit. Consistently showing these positive behaviours signals to lenders that you’re a reliable borrower, which can help boost your score over time.



Do credit scores affect my ability to borrow money?

Yes, a good credit score can make it easier to secure loans. It can also afford you better terms, like lower interest rates or higher borrowing capacities. Lenders view a high score as an indicator of lower risk, suggesting you’re more likely to meet your repayments.

Then again, having a low credit score doesn’t mean you’ll automatically be turned down for credit. Lenders consider a multitude of factors, not just your score. But it might mean you’ll need to stick to lenders who offer low credit score loans, which may have higher interest rates. That’s why maintaining a good credit score is beneficial – it can give you more financial flexibility and options.

Because credit scores play an important role in your personal finances, it’s crucial to be informed about what is a good credit score Australia-wide and to frequently monitor your own so that you can work on improving it if necessary. 

You can ask each of the credit reporting agencies for a free copy of your credit report every three months. But there’s an even simpler way to stay informed about your score: MONEYME’s Credit Score tool. With this tool, you can get a free, fast, and personalised credit score check in Australia via the MONEYME mobile app.

You’ll be able to see the same information that banks and lenders use to evaluate your creditworthiness. With this, you can find out how to increase your credit score fast if need be. Taking control of your finances begins with understanding your credit score.

With the MONEYME app, you can take that understanding a step further. You can get your credit score in minutes for free and receive personalised insights about your report. By giving you access to the same creditworthiness information banks and lenders use, the MONEYME app makes you a more educated consumer. 

If you’re aiming for a strong credit profile, it’s vital to educate yourself about ‘What is a good credit score Australia-wide?’ and strive to meet or exceed those benchmarks. Thankfully, our app is loaded with tips and tricks on how to improve your credit score.

Getting started is as simple as downloading the MONEYME app, available in both the Apple and Google app stores. By entering a few simple details such as your name, number, email, date of birth, address, and driver’s licence number (optional), you can get a comprehensive understanding of your credit standing.

In summary, before applying for credit, it’s crucial to evaluate ‘What is a good credit score Australia-based lenders consider?’ This helps you determine your chances of receiving approval and favourable terms. Monitoring your credit score regularly through the MONEYME app also allows you to stay on top of your personal finances and work on improving your score if needed. 

 

*Canstar’s Innovation Excellence Award 2022 was for MONEYME’s product Autopay. Credit scores are provided by Price Enquiry Pty Limited ACN 647 624 155.

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