A good credit score in Australia is generally considered 600 or above on the Equifax scale (0–1,200), or 500 or above on the Experian scale (0–1,000). However, what lenders consider "good enough" varies significantly by loan type, lender, and how competitive a rate you want.
This guide breaks down every credit score range, what each means for your borrowing power, and exactly what you can do right now to improve your standing.
How Australian Credit Scores Work
Australia uses a positive credit reporting system (introduced in 2018), which means your credit file now includes not just negative events (defaults, enquiries) but also positive data — on-time repayments, account ages, and credit limits.
Three main bureaux issue scores in Australia:
| Bureau | Scale | "Good" Threshold | "Excellent" Threshold | |--------|-------|------------------|-----------------------| | Equifax | 0–1,200 | 625–699 | 853–1,200 | | Experian | 0–1,000 | 500–699 | 800–1,000 | | Illion (illion Score) | 0–1,000 | 500–699 | 800–1,000 |
Each bureau calculates scores independently using its own algorithm. It's common for your score to differ by 20–100 points between bureaux for the same credit file.
Credit Score Ranges Explained
Equifax Scale (Most Commonly Used by Lenders)
| Score Range | Rating | What It Means | |-------------|--------|---------------| | 853–1,200 | Excellent | Access to the best rates; fast approval from all major lenders | | 735–852 | Very Good | Most lenders approve; competitive rates available | | 661–734 | Good | Most mainstream lenders approve with standard conditions | | 460–660 | Average | Some lenders approve; higher rates; possible LMI requirements | | 0–459 | Below Average | Limited lender options; specialist/non-conforming products only |
What Lenders Actually Use
Major Australian banks (ANZ, CBA, NAB, Westpac) don't rely solely on your bureau score. They run their own internal credit scoring models that layer on:
- Debt-to-income (DTI) ratio — most banks cap at 6–8× gross income
- Repayment history on existing accounts
- Employment type — PAYG vs self-employed vs casual
- Genuine savings (for home loans)
- Current liabilities — BNPL, personal loans, car finance
A 700 Equifax score with a DTI of 9× will be declined by every Big 4 bank. Conversely, a 580 score with strong savings, stable employment, and no defaults may be approved by a non-bank lender.
What Score Do You Need for Each Loan Type?
| Loan Type | Minimum Indicative Score | Preferred Score | |-----------|--------------------------|-----------------| | Home Loan (Big 4 bank) | 650–680 | 750+ | | Home Loan (non-bank) | 550–600 | 650+ | | Car Loan (bank) | 600 | 700+ | | Car Loan (dealership finance) | 500 | 620+ | | Personal Loan | 580 | 680+ | | Business Loan | 600 | 700+ | | Credit Card (rewards) | 700 | 800+ |
These are indicative ranges — individual lender policies differ substantially.
The 6 Factors That Determine Your Credit Score
Understanding what drives your score is the fastest path to improving it.
1. Repayment History (35% weight)
Every on-time payment adds positive data; every missed payment (14+ days late) creates a negative listing. A single default can drop your score by 100–200 points. Under positive credit reporting, consistent on-time repayments actively lift your score month by month.
2. Credit Enquiries (20% weight)
Every time you apply for credit, a "hard enquiry" is recorded on your file. Multiple enquiries in a short period signal financial stress to lenders — each enquiry can reduce your score by 5–20 points. Enquiries remain on file for 5 years.
3. Account Age and Mix (15% weight)
Older accounts with positive history contribute more to your score than newer ones. A mix of credit types (mortgage, car loan, credit card) is viewed more favourably than a single type.
4. Credit Utilisation (15% weight)
This applies primarily to revolving credit (credit cards, overdrafts). Keeping your utilisation below 30% of your limit is optimal. A $10,000 credit card limit used at $8,000 hurts your score even if you pay it off monthly.
5. Defaults and Court Judgements (10% weight)
Any unpaid debt referred to a collection agency or listed as a default remains on your file for 5 years. Paid defaults remain listed but are marked as "paid" — this still affects your score but less severely.
6. Bankruptcy and Part IX/X Agreements (5% direct, catastrophic indirect)
Bankruptcy stays on your credit file for 5 years from the date of discharge (or 2 years from the end of the bankruptcy period, whichever is longer). During this time your options are limited to specialist non-conforming lenders.
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How to Check Your Credit Score for Free
You're entitled to one free credit report per year from each Australian bureau:
- Equifax: equifax.com.au — free report, score available via CreditSavvy
- Experian: experian.com.au — free score and report
- Illion: illion.com.au — free report via CreditSimple
Third-party apps (Credit Savvy, CreditSimple, GetCreditScore) provide free ongoing monitoring connected to one bureau. Note that the score displayed in these apps may differ from what a lender sees when they pull your file.
How Long Does It Take to Improve a Credit Score?
| Action | Typical Impact Timeline | |--------|------------------------| | Stop applying for new credit | 3–6 months (enquiries age off impact) | | Pay all bills on time | 6–12 months for measurable improvement | | Reduce credit card utilisation | 1–3 months after statement closes | | Resolve a default (negotiate and pay) | Immediate listing update; score lifts 3–6 months | | Dispute an error on your file | 30 days (bureau investigation period) | | Bankruptcy discharge | 5 years from discharge for full recovery |
Common Credit Score Myths (Busted)
Myth: Checking your own score hurts it. False. Self-checks are "soft enquiries" and have zero impact on your score. Only lender-initiated "hard enquiries" affect your score.
Myth: A high income means a high credit score. Income is not a factor in credit bureau scoring. A high-income earner with multiple missed payments will score lower than a moderate-income earner with a perfect repayment history.
Myth: Closing old credit cards improves your score. Often the opposite. Closing old accounts can reduce your average account age and increase utilisation on remaining cards — both negatively affect your score.
Myth: You have one credit score. You have multiple scores — one per bureau, potentially different for each product category (home loan vs car loan vs credit card).
FAQ
What is the average Australian credit score? The average Equifax score in Australia is approximately 665, which sits in the "good" range. However, averages vary significantly by age group — younger Australians (18–24) average around 550, while those 55+ average over 750.
Does your credit score affect your interest rate? Yes, significantly. The difference between a 650 and 800 score can be 0.5–2.0% on a home loan rate. On a $500,000 loan over 30 years, that's $60,000–$200,000 in additional interest.
Can I get a loan with a bad credit score? Yes, but your options narrow and rates increase. Specialist non-bank lenders (Bluestone, Pepper Money, La Trobe) specifically cater to borrowers with impaired credit. A finance broker can identify the best option for your specific situation.
How often is my credit score updated? Bureau scores update monthly, though lenders report your account data to bureaux at different intervals — typically monthly. Significant events (defaults, applications) trigger more immediate updates.
Does my partner's credit score affect mine? Not directly — you each have separate credit files. However, joint loan applications combine both applicants' profiles, so a low-scoring partner can affect a joint application outcome.