When you apply for credit in Australia, the credit provider will usually ask for your permission to obtain and access the information on your credit report. The information helps them determine how you manage repaying other credit obligations and process a decision to approve your application.

Your Experian credit score is a snapshot of the strengths and weaknesses in your Experian credit report. The score gives you an idea of how credit providers may view your credit report and the information contained in it when assessing your application for credit. View the information on your topic of interest below.

There are three credit reporting bodies who provide credit scores to credit providers in Australia - Experian, Equifax and Illion. Each credit reporting body has their own way of calculating their score, so your credit score is not the same across the three credit reporting bodies. Your Experian Credit Score can range from between zero and 1000, with a higher score signalling a healthier credit history. A higher score could indicate that you have a history of managing your credit sensibly and making repayments on time.

Your credit score is a snapshot of the strengths and weaknesses in your credit report, as interpreted by the credit reporting body. If you have a good record of making loan repayments on time, your score is likely to be much higher than if you have missed repayments. Your credit score is derived by a credit reporting body from your credit report. The credit report holds information supplied by lenders to the credit reporting body.

It’s important to remember that a credit score is not the only thing a credit provider looks at when considering whether to give you credit. In fact, some credit providers may not look at the score at all. Either way, all credit providers will also look at your financial situation (including income, expenses and other existing debt) before deciding whether to approve credit.
There are steps you can take to proactively manage your Experian credit score, learn more here.
 

Your Experian credit score is derived from all the information that Experian collects from credit providers, such as your borrowing and repayment habits, and any enquiry activities. Your Experian credit score summarises several positive and negative factors that aim to predict how likely you are to honour your credit commitments in the future.

Once you make an application for a consumer credit product with a credit provider, the credit provider may contact Experian to request your credit reporting information. Your credit reporting information contains your credit history and helps the credit provider make a decision on your credit application. Remember, the credit reporting information available on your  Experian credit report is only a portion of what the credit provider may consider in assessing your credit application.

A favourable credit score can help you reach your financial goals, while a low credit score may limit your financial opportunities. Since your credit score could influence whether you are able to buy a home or receive any kind of credit, it is extremely important to protect your credit score by making loan and account payments on time and not taking on more debt than you can repay.

Key information used to calculate your credit score includes account information (personal loans, credit accounts, other consumer credit loans), and public records, such as judgments and bankruptcies. Information such as financial hardship, race, gender, where you live and marital status are not used in calculating credit scores.

Your Experian credit score is calculated using a statistical algorithm that collects past events to predict future behaviour. Each credit reporting bureau uses a slightly different algorithm and does not disclose in detail how this is calculated.
There are key attributes that are used to generate your Experian credit score:

● The type of credit provider that has made enquiries on your Experian credit report
● The type of credit product you have applied for
● Your repayment history
● The credit limit of each of your consumer credit products
● The number of credit enquiries and any negative events, such as defaults or bankruptcies.

You can check your credit score by ordering a copy of your Experian credit report. You may obtain a free report once every three months. You can also request a copy of your credit report from Australia’s other credit reporting bodies, Illion and Equifax

Show me my Experian Credit Report.
 

Your Experian credit score is calculated by taking into consideration several financial and behavioural factors such as your credit history, repayments and credit type, amongst others.

The main factors that impact your credit score include:

Payment History (High Impact) - Making regular payments will have a positive impact on your credit score. Missing payments may have a negative impact on your credit score.

Age of the Credit (Medium Impact) - A long credit history in which you have made payments on-time works favourably for your credit score. It gives lenders such as banks and non-banking lenders insight into your repayment pattern over the course of time. It reflects your experience in handling credit and can influence credit providers’ confidence.

Total Types of Account (Low Impact) - It is ok to have a balance of secured as well as unsecured loans in your credit history, provided you make payments on time. Showing you can consistently keep up with substantial payments, such as a monthly mortgage can favourably impact your score.
A home loan or mortgage is an example of a secured loan while a credit card is an unsecured loan. A mixed credit portfolio helps boost your credit score.

Number of Hard Enquiries - Every time you apply for credit, the credit provider will reference your credit report which will trigger a hard enquiry. Multiple enquiries in a short timeframe may raise a red flag to lenders and they could be reluctant to offer you credit. Credit providers may see multiple enquiries in rapid succession as a sign of financial difficulty.
 

  • Making multiple credit applications in a short space of time. Credit providers may view multiple enquiries in rapid succession as a sign of financial difficulty
  • Missing payment dates on your credit account(s). Credit providers may view missed payments as a sign of financial difficulty
  • Having large values of unsecured credit available
  • Adverse events that appear on your credit file, such as a default, bankruptcy or court judgment related to credit. Credit providers may consider the age, value, and number of adverse event(s) on your credit account(s)
  • Outstanding accounts with debt purchase organisations. Credit providers could potentially sell long term outstanding debt to a debt collector, who may then report the account to credit bureaus
  • Applying for or accessing short term credit. This may include using organisations that offer fast loans at high interest rates
     

There are several reasons why you may not have an Experian credit score, such as:

  • You are not credit active, meaning you have not applied for credit recently, or the credit you had is no longer active
  • Your credit history is older than 5 years and may have dropped off your credit report
  • Your lender may not be providing data to Experian
  • The personal information you supplied may not have matched data that the banks have supplied to us
     

Your Experian credit report is updated as your financial activity is received from your credit providers each month. The information received from credit providers can include credit enquiries (resulting from credit applications you have made) and overdue debts. It can also include publicly available information such as judgements and bankruptcy filings.

Your Experian credit score may improve or decline as a direct result of new information. For instance, if you already have a low credit score, a new default may not lower your score any further; similarly, if you already have a very high credit score, continuing to make your payments on time may not always increase your score.
 

Your Experian credit score is re-calculated when it is requested by you, the individual, and will change when new information is added, removed, has aged or drops off due to length of time. Your Experian credit score may not always change when the data has changed.

It is worthwhile noting that a variation in your score of plus or minus 10 points or less is expected, and typically nothing to be concerned with.
 

No. Credit providers may use your credit score(s) when assessing any application you have made for consumer credit, but these lending decisions are based on each financial institutions’ individual assessment criteria. Lenders will also consider other data when making the decision on whether to lend to you or not.

The Experian credit reporting body cannot comment on the processes or lending criteria of credit providers regarding credit application assessment. If you are concerned, we recommend you enquire with the relevant individual credit provider about how they may assess your personal credit information.
 

The first step a credit provider, such as a bank, takes when you apply for a new credit product is to inform a credit reporting body about the application. The credit application does have the potential to change a score, although it does not necessarily mean your credit score will decline.