Amanda Smith
Georgia Rose
Athena Cocoves
Your credit score does matter in Australia, and it is an important metric to keep track of. It represents your credit history — how much credit you have, whether or not you repay it on time, and how often you apply for it. Simply put, your score provides a picture of how responsible you are at handling credit.
If you’ve made mistakes in the past, don’t let it paralyse you. Get a free credit report to learn more about what’s affecting your rating, and take remedial action to improve your score
Jump to
- 1. How much does your credit score matter in Australia?
- 2. What’s the average credit score in Australia?
- 3. What credit bureau do banks use in Australia?
- 4. Do buy now, pay later services affect credit scores?
- 5. What’s the minimum credit score needed for a personal loan?
- 6. What’s the minimum credit score needed for a car loan?
- 7. What’s the minimum credit score needed for a home loan?
- 8. What’s the minimum credit score needed for a credit card?
- 9. What’s the minimum credit score needed for a mobile phone contract?
- 10. What if I don’t have a credit score?
- 11. How long does a bad credit rating last in Australia?
- 12. When does a default get removed from your credit history in Australia?
1. How much does your credit score matter in Australia?
If you’re planning to apply for a credit card, upgrade your car, buy a house or build a business, having a high credit score will improve your chances of securing a loan or line of credit at competitive rates.
A ‘good’ credit score for Equifax is 622+. For Experian, it’s 625+. For Illion, it’s 500+. With a healthy credit score, you may be better positioned to negotiate better deals and generally pay less interest.
» MORE: 7 money management skills to master ASAP
2. What’s the average credit score in Australia?
The current national average Equifax credit score is 855, according to the Equifax Australian Credit Scorecard 2023[1]. However, the three major reporting bureaus have different methods for determining their scores and, therefore, may have different averages.
Credit scores vary across states, with research showing that the ACT, Tasmania and Victoria have the highest averages. They also differ based on age, as shown in the table below.
| Age group | Average Equifax credit score |
|---|---|
| 18 to 30 | 731 |
| 31 to 40 | 829 |
| 41 to 50 | 868 |
| 51 to 60 | 918 |
| 61 to 70 | 934 |
3. What credit bureau do banks use in Australia?
There are three main credit reporting bodies in Australia: Equifax, Experian, and Illion. The Big Four banks — Westpac, ANZ, NAB, and the Commonwealth Bank — work with all three and share relevant information with each bureau.
The credit rating ranges for these bureaus are as follows:
| Equifax | Experian | illion | |
|---|---|---|---|
| Below Average or Low Score | 0-459 | 0-549 | 1-299 |
| Average, Fair or Room for Improvement | 460-660 | 550-624 | 300-499 |
| Good | 661-734 | 625-699 | 500-699 |
| Very Good or Great | 735-852 | 700-799 | 700-799 |
| Excellent | 853-1200 | 800-1000 | 800-1000 |
4. Do buy now, pay later services affect credit scores?
It depends on which BNPL company you use. BNPL isn’t currently regulated under Australia’s National Consumer Credit Act, so providers aren’t required to check the credit of new applicants.
However, many still do. For example, ZipPay typically performs credit checks on new customers, while AfterPay may only do so when a current customer applies for a limit increase.
It’s important to know that these rules are likely to change in the coming year. In June 2024, the Australian government introduced legislation to regulate BNPL like other forms of credit. If approved, BNPL services will need to act more like credit card companies.
» MORE: Can you use a credit card to buy now and pay later?
5. What’s the minimum credit score needed for a personal loan?
In general, you should aim for a ‘good’ rating when applying for a personal loan. Going by Experian’s range, this is between 625-699. Having a good rating may help reduce the interest rate and fees, while also giving you a higher borrowing capacity.
» MORE: 9 reasons you can’t get approved for a loan
6. What’s the minimum credit score needed for a car loan?
Like personal loans, there’s no industry or nationwide credit minimum for a car loan approval. However, a rating of ‘good’ or higher will help your chances of securing a loan with reasonable rates.
» MORE: What’s the difference between a car loan and a personal loan?
7. What’s the minimum credit score needed for a home loan?
A mortgage will likely be your largest debt so it pays to have a healthy credit score before applying for a home loan. High scores can sometimes lead to lower rates, which means saving more money over the term of the loan and potentially paying less for your house.
Aim for at least a score that falls under the ‘good’ credit rating, but if possible, reach the ‘very good’ or ‘excellent’ categories.
» MORE: What determines home loan eligibility?
8. What’s the minimum credit score needed for a credit card?
It’s best to have a ‘good’ credit score before you apply for a credit card. A high credit score can get you lower interest rates and access to types of credit cards with better perks.
» MORE: 9 things to know before getting your first credit card
9. What’s the minimum credit score needed for a mobile phone contract?
Phone companies typically perform a credit check when you apply for a new plan. There is no industry minimum for phone contracts. A customer’s personal circumstances are typically considered alongside a credit assessment.
Telstra connects with all three credit bureaus, whereas Vodafone and Optus only use Equifax and illion. Prepaid phone contracts don’t typically run a credit check, as it’s not a form of credit.
» MORE: What exactly is a credit check?
10. What if I don’t have a credit score?
If you’re new to Australia or haven’t yet built up your credit profile, there are ways to get the ball rolling. For example, paying your utility bills on time can help build your score, as well as opening a checking and savings account.
Credit history is not the only factor banks use to determine creditworthiness. Personal factors, such as employment and income, may also be used.
You may also want to consider getting someone you trust with a healthy credit history to be a co-signer. Co-signers are equally responsible for the debt, so make sure you both understand the risks before proceeding.
» MORE: What to consider before sharing a credit card
11. How long does a bad credit rating last in Australia?
Depending on the circumstances, it can take between one to seven years for information to be removed from your credit report.
| Factor | Length of time |
|---|---|
| Serious credit infringements. | Seven years. |
| Bankruptcies and debt agreements. | Two or five years, depending on the circumstances. |
| Court judgements, credit enquiries and defaults. | Five years. |
| Current debt obligations and repayment history. | Two years. |
| Financial hardship information. | One year. |
» MORE: What is financial counselling, and who can it help?
12. When does a default get removed from your credit history in Australia?
Defaults stay on your credit history for five years. Reporting bureaus classify a consumer default as a debt of at least $150 that is 60 days or more overdue. Credit bureaus must send two notices before the debt can be listed as a default.
Check all your contact details are up to date, so banks and lenders can send notices to the correct location.
» MORE: What happens if you miss a mortgage payment?
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