What to know about your credit score in Australia

Rapid Finance on 26 June 2017

Report finds Aussies not up on credit reports

A recent report by research company, Experian, found that as many as 65% of Australians are misinformed about credit reports and what constitutes a good or poor credit score in Australia.

Millenials Computer Main SupportAnother report regarding 'millennials' and their attitude toward debt stated that 29% of young people over-estimate their credit score. And that a huge 67% of millennials don't understand how a credit score in Australia is created.

While consumer advocate group CHOICE reports that 59% of Australians don't understand how credit reporting works at all. These are unsettling figures, given the importance of a credit score in Australia.

Here's what many Aussies don't know.

Why credit reports matter

Every time you apply for a car loan, mortgage, or even a jet ski loan, someone will check your credit score.

The resulting credit report, generated by one of the big credit reporting agencies, more than anything will determine whether your loan application is approved. Or denied.

Ask someone, who's tried finding home loans with bad credit. They'll tell how difficult it can be.

Simply put, your credit report, which outlines your credit score, can make or break your loan application.

Myths about the common credit score in Australia

Some of the most frequent misconceptions about credit reports and scores are as follows.

Myth #1: A pay-rise at work will improve my credit score

A pay-rise may increase your ability to get a loan, but, it won't necessarily improve your credit score.

Myth #2: I will be penalised for checking my credit score too often

You can check your credit score as often as you like. You will not be penalised for doing so. However, requesting multiple credit reports may attract service fees.

Myth #3: I have to pay to check my credit score

Paying Credit Main SupportAt Rapid Finance, we can check your credit score, free of charge. Click here to get your free credit check.

Myth #4: Applying for multiple loans in a short space of time will not affect my score

Every time you apply for a loan (or credit card) the outcome of that application is recorded on your credit report. Many rejected applications in a short space of time could negatively affect your credit score.

Myth #5: My credit score is probably fine

A recent survey of 2,000 Australians conducted by website finder, found that two out of three respondents had an average score, not good or excellent, and only just above poor. At the same time, 29% of millennials over-estimate their credit score. To be sure, about your credit-worthiness, get a credit report today.

How to improve your credit score expertise (right now)

In many ways, when it comes to understanding the in's and out's of a credit score in Australia, we are behind some of the rest of the world. In the USA, for example, Americans are more likely to understand credit reports and what it means for their ability to borrow.

As Experian M.D. Andy Sheehan said when asked about attitudes in Australia:

"In overseas markets, consumers are more empowered to take charge of their credit profile, actively manage their credit reputation and use it to get a better deal."

Luckily, there are a few things you can do, right now, to improve your credit score expertise.

Woman Phone Bill Main SupportStep #1: Request a credit report

The first and most important step is to check your credit score. So you know exactly where you stand credit-wise. Click here to do this online now.

Step #2: Learn what affects your credit score

There are a lot of great resources online for learning about credit reports. For example, you can read two of our recent articles in our resource centre. Both are filled with loads of handy tips.

How good credit helps you to get a low interest loan

5 ways to use your credit rating to get a better loan

Step #3: Cut bad credit habits

Missing the odd bill. Forgetting to make that monthly minimum credit card payment. It's not hard to do. But it can all add up. So, cut your bad credit habits today. And start working on new and better ones.

Step #4: Fix any mistakes on your credit report

Mistakes get made. Sometimes mistakes get made in credit reports. It's unfortunate. But, it happens. So, check yours for mistakes, and if you find any, have them corrected as soon as possible.

Step #5: Start improving your credit score long term

When it comes improving your credit score in Australia, there is no quick fix. Improving your knowledge and creditworthiness is a long term solution. So, start today and keep at it.

"Simply put, credit reports can make or break your loan application."

We could help you to get back on track

Requested one or several credit reports? Don't like what you've found? Is it affecting your ability to secure a loan? At Rapid Finance we may be able to help you to get back on track.

Whether you need a car, home, or personal loan, we could connect you to a suitable finance product. We have a range of loan options, ideal for Australians in a range of circumstances.

Get a free credit check online or call 1300 467 274.