Have you ever applied for a loan or credit in Australia? If yes, then you will have a credit score. Now, the question arises of what credit score you must have to apply for a loan. Why does it matter? To learn more about these questions, read this blog. In this blog, we will discuss good credit scores and much more.

What is a good credit score in Australia?

Credit scores in Australia are calculated by credit reporting agencies using different ways, so credit scores may vary. However, a credit score over 660 is considered good, while a credit score of 853 or over will be considered excellent. Having a good credit score means you are a responsible borrower and may have a high chance of getting approved for a loan with better interest rates.

Despite this, lenders also consider other factors, such as your income, debt you have, and employment history, when making credit decisions. It’s crucial to check your credit score and identify inaccuracies or errors to maintain a good credit score.

What is the highest credit score in Australia?

A credit score ranges between 0 and 1000 (or sometimes 1200, based on the credit reporting bodies). The lenders use this credit score rating to decide whether to give you a loan. If you have a higher score, there will be more chances of getting approved for a loan. Above 660 credit score is considered good, while a credit score of 853 or above is excellent.

How to improve credit score in Australia?

Various ways can be used to improve your credit score, such as:

  • It is essential to look after your credit score. You can use a trusted tool to check your credit score.
  • In your credit score report, ensure to check errors (if any). If you find any errors, find ways to correct them. Possible errors might be incorrect personal details, inaccurate missed payments, unpaid debt you never received notification about, etc.
  • If you have missed a payment on a bill by over 14 days, then pay off your payment.
  • Don’t avoid paying your repayments. Pay your repayments on time.
  • If you currently have a credit card and you’re consistently making repayments on time, you can boost your credit score by reducing the card limit.
  • A borrower who has one credit card and a home loan and consistently makes repayments on time is likely to have a strong credit score. However, if you have three credit cards and two personal loans, it will be difficult to improve your credit score even if you make all repayments on time. If you can reduce the number of credit cards to one or two and consolidate your loan debts, you can increase your credit score.
  • Don’t apply for multiple debts at one time. Ensure that your application is completed accurately and you are eligible for the loan product.

How is a credit score calculated?

Your credit score is calculated by considering various factors linked to your credit history. This generally includes:

  • your repayment history for any loan
  • a summary of money you borrowed in the past
  • an estimate of your ability to repay on time
  • any credit limits
  • the frequency and number of credit applications you have applied for in the past
  • any defaults, bankrupts, or court judgments in your name

How often does your credit score change?

Changes to your credit score are based on how often your credit report is updated. Your credit score will be affected when the credit reporting body updates the information. Deleted or added information can impact your credit score.  Any new information is more likely to affect your credit score than older information. Generally, your credit score won’t change much over time if your credit usage doesn’t change. Keep one thing in mind when your credit score is calculated, it considers the information that is on your credit report.


Whether you have started building your credit or are looking to improve your credit score, you can contact Reliable Melbourne Accountants.

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