How to check your credit score

You’ve heard the term credit score, but what does it mean and how can you check yours?

What is a credit score?

Your credit score is like a financial report card. It's a three-digit number that reflects your creditworthiness, summarizing your history of managing debt and making payments on time. This score is used by lenders to assess the risk of lending you money, whether it's for a credit card, personal loan, or a mortgage.

Why it's important to know your credit score

Knowing your credit score is crucial for several reasons. It can influence your ability to secure loans, the interest rates you'll be offered, and even your chances of being approved for a rental property. A higher credit score can open doors to better financial opportunities and save you money in the long run. 

What is a normal credit score in Australia?

In Australia, credit scores typically range from 0 to 1,200, depending on the credit bureau. A higher score indicates better creditworthiness. While definitions of a "normal" credit score can vary, here's a rough breakdown:

• Excellent: 800–1,200
• Very good: 700–799
• Good: 625–699
• Fair: 550–624
• Poor: 0–549

A score above 700 is generally considered good, but keep in mind that different lenders may have different criteria.

How to check your credit score in Australia

Checking your credit score is easier than ever, and it's something every first-time borrower should do. There are several credit reporting agencies in Australia, such as Equifax, Experian, and Illion. You can request a free copy of your credit report from these agencies once a year. However, there are also paid services and online tools that allow you to check your score more frequently.