What Is a Credit Score in Australia?
A credit score is a number that summarises your credit history — how reliably you have borrowed and repaid in the past. In Australia, credit scores are calculated by three private credit reporting bureaus: Equifax, Experian and Illion. Each uses a slightly different scale and algorithm, so your score will vary slightly between bureaus. Lenders can access any of these reports, and most have preferred bureau relationships.
Your credit report — the underlying document your score is derived from — contains a record of every credit application you have made, every credit account you hold, your repayment history, and any negative events such as defaults, court judgements or bankruptcy. Since 2019, Australia has operated under Comprehensive Credit Reporting (CCR), which means positive repayment behaviour (paying on time) is now recorded alongside negative events — making it possible to build your score actively, not just avoid damaging it.
Three Credit Bureaus: Equifax, Experian, and Illion
| Bureau | Score Range | Band Labels | Major Lenders Who Use It |
|---|---|---|---|
| Equifax (formerly Veda) | 0 – 1,200 | Below Average / Average / Good / Very Good / Excellent | Most major banks including CBA, Westpac, ANZ |
| Experian | 0 – 1,000 | Poor / Fair / Good / Very Good / Excellent | NAB, ING, Macquarie |
| Illion (formerly Dun & Bradstreet) | 0 – 1,000 | Low / Medium / High / Very High | Various non-bank lenders |
Because lenders typically use one preferred bureau, your application outcome can differ depending on which bureau's file they pull. This is one reason why an experienced broker — who understands which bureau different lenders prefer — can position your application more effectively than going directly to a bank.
Credit Score Thresholds by Lender Type
No lender publicly states their exact credit score requirement, but based on real-world application outcomes across the industry, these are the practical ranges for different lender types (Equifax scale, 0–1,200):
| Lender Type | Typical Score Required | Default Tolerance | Notes |
|---|---|---|---|
| Big 4 banks (CBA, ANZ, Westpac, NAB) | 650 – 700+ | Generally none for active defaults | Also assess income, LVR and employment type heavily |
| Second-tier banks (Macquarie, ING, BOQ, Bendigo) | 600 – 650+ | May consider paid, older defaults | More flexible than Big 4 on some criteria |
| Non-bank lenders (Liberty, Firstmac, Resimac) | 550 – 600+ | Consider some defaults with explanation | Good option for scores below 650 |
| Specialist/non-conforming lenders | Below 550 considered | Can work with active defaults | Rates typically 2–4% above standard; short-term strategy |
⚡ Important: Score Is Not the Only Factor
A borrower with a 680 score, 20% deposit, stable employment and no defaults in 3 years will almost always be approved. A borrower with a 720 score but 95% LVR, multiple credit enquiries in the last 6 months, and two recent missed payments may be declined. Score is a signal — lenders also weigh your deposit, income stability, existing debts, employment type, and whether any negative events have a plausible explanation.
What Damages Your Credit Score Most
Understanding what hurts your score is as important as knowing what helps it. Listed from most to least damaging:
Defaults and serious credit infringements
A default (an overdue debt of $150+ that the creditor has listed after giving formal notice) is the most serious negative event. Defaults remain on your credit file for 5 years. Paid defaults are viewed more favourably than unpaid ones, but both are significant red flags for major bank lenders.
Bankruptcy and court judgements
Bankruptcy is listed for 5 years from discharge (or 7 years from the date of filing, whichever is longer). Court judgements appear for 5 years. These are serious enough to require specialist lenders in most cases.
Multiple credit applications in a short period
Every hard credit enquiry (when a lender accesses your report for a credit decision) appears on your file. Multiple applications in a short period signal financial stress or credit shopping, reducing your score and raising red flags. Each enquiry remains on your file for 5 years.
Missed or late repayments
Under CCR, all repayment history is now recorded — not just defaults. A missed repayment for 14+ days appears as a late payment. A pattern of late payments substantially reduces your score and is visible to every lender who pulls your report.
High credit utilisation
Using more than 70–80% of your available credit card limit signals financial pressure. Keeping all cards below 30% of their limit is optimal for your score. Note: lenders assess the limit of your credit cards, not just the balance — even a card you don't use represents potential debt in a lender's assessment.
How to Check Your Credit Score for Free
Under Australian law, you are entitled to access your credit report from each bureau once every 3 months free of charge. You can also access your report free within 90 days of being declined for credit. You are also entitled to request a correction of any inaccurate information on your report.
- Equifax: Free annual credit report at equifax.com.au — also available via myGov
- Experian: Free score via ClearScore (free account, updates monthly)
- Illion: Free credit report at creditsavvy.com.au
💡 Checking your own score does NOT affect it
Viewing your own credit report or score is a "soft enquiry" — it has zero impact on your credit score. You should check all three bureaus before applying for a home loan, as different lenders use different bureaus and your scores may vary meaningfully between them.
8 Practical Strategies to Improve Your Credit Score
Pay every bill on time — without exception
Under CCR, timely repayments are now recorded positively. 24 months of clean payment history can lift your score substantially. Set up automatic direct debits for all regular bills, loan repayments and credit cards to eliminate missed payment risk.
Reduce credit card balances and limits
Pay down card balances to below 30% of each limit. Better still, close cards you don't use — lenders assess your total available credit limit as potential debt, even on zero-balance cards. Closing unused cards reduces your assessed debt exposure.
Do not apply for any new credit in the 6 months before your home loan application
Every new credit application — including buy now pay later accounts, personal loans, car finance and credit cards — creates a hard enquiry and may reduce your score. A flurry of enquiries in a short period is especially harmful.
Pay off or negotiate any outstanding debts in collections
Unpaid defaults are significantly more damaging than paid ones. If you have an overdue debt in collections, settling it (and obtaining written confirmation) can shift it from "unpaid default" to "paid default" on your file — a meaningful improvement for lender assessment.
Check your credit report for errors and dispute them
Credit file errors are more common than most people realise. Debts that were paid but still show as outstanding, incorrect personal information, or accounts that don't belong to you can all drag down your score. Contact the relevant credit bureau directly to dispute inaccurate listings — they are legally required to investigate and correct genuine errors.
Consolidate multiple small debts
Multiple small loans create multiple enquiries and multiple monthly commitments that affect your serviceability. Consolidating into a single personal loan (if you can do so without a new hard enquiry) can simplify your profile and improve your assessed serviceability.
Build a genuine savings history
While not directly a credit score factor, 3–6 months of consistent savings deposits strengthens your overall application quality enormously. Lenders see this as evidence of financial discipline and capacity to manage loan repayments.
Use a mortgage broker who can pre-screen without a hard enquiry
An experienced broker can assess your credit profile and identify the right lender before any formal application is submitted. This means your credit file only receives one enquiry — not multiple — when you're ready to proceed. Our guide to mortgage brokers explains how they work and why this matters.
Applying With a Default or Credit Issue on File
Having a default on your credit file does not automatically mean you cannot get a home loan. The key variables are:
- Age of the default: Defaults older than 2 years, particularly paid defaults, are considered far more tolerantly than recent ones
- Whether it is paid or unpaid: Paid defaults are significantly less damaging
- The amount: A $200 default from a forgotten phone bill is very different to a $20,000 default from a previous mortgage
- The category: A credit card default is viewed differently to a mortgage default
- The explanation: A lender who can understand why a default occurred (job loss, medical event, relationship breakdown) is more likely to take a considered view
If you have credit issues, a broker with experience in credit-impaired lending can identify the best lender for your specific file and help you present the strongest possible application. See also our guide on home loan types and services we offer.
✅ Get a Free Credit and Borrowing Assessment
Our broker partners review your full financial picture — including your credit profile — before approaching any lender. Book a free call or use our Smart Home Loan Check to get started.
Frequently Asked Questions
There is no single universal minimum, as each lender sets its own policy. As a practical guide: major banks typically want an Equifax score of 650–700+ with no active defaults; second-tier banks and credit unions will consider 580–650; non-conforming specialist lenders can approve scores below 500, but at rates 2–4% above standard. Deposit size and income also significantly influence the outcome alongside score.
You can check your credit score free at any time through several services: Equifax offers a free annual report at equifax.com.au; Experian offers a free score via ClearScore; Illion operates through their own reporting service. You are legally entitled to a free credit report from each bureau once every three months under Australian law. Checking your own score does NOT create a credit enquiry and will NOT affect your score.
The most effective short-term strategies are: pay all current bills and loan repayments on time (even one missed payment can drop your score 50–100 points); reduce credit card balances to below 30% of each card's limit; do not apply for any new credit products in the 3–6 months before your home loan application; check your credit report for errors and dispute any inaccurate listings through the credit bureau directly.
No. Checking your own credit score or report is called a "soft enquiry" and has no impact on your score. Only "hard enquiries" — created when a lender or credit provider accesses your report as part of a credit application — affect your score. This is exactly why you should check your score before applying for a home loan, not after. Multiple hard enquiries in a short period (from applying to multiple lenders directly) can noticeably reduce your score.
It depends on the type, age and amount of the default. Paid defaults older than 2 years are often acceptable to second-tier lenders. Unpaid defaults, or defaults on other lenders' home loans, are much harder to overcome. Specialist (non-conforming) lenders can approve applications with active defaults, but at significantly higher interest rates. A broker experienced in credit-impaired applications can identify the most suitable lender and help you present the strongest possible case.