1. What is a Credit Score?

A credit score is a numerical representation of your creditworthiness used by lenders in Australia. It ranges from 0 to 1200 (Equifax scale) and is based on your credit history, with higher scores indicating lower risk to lenders.

2. How Does the Calculator Work?

The calculator uses a weighted formula based on key credit factors:

Where:

• Payment History (35%): Percentage of on-time payments
• Credit Utilization (30%): Percentage of available credit being used (lower is better)
• Credit Age (15%): Length of your credit history in years
• Credit Mix (10%): Variety of credit types (credit cards, loans, etc.)
• Inquiries (10%): Number of recent credit applications (fewer is better)

3. Importance of Credit Score

Details: Your credit score affects your ability to get loans, credit cards, and even rental applications. Higher scores typically result in better interest rates and loan terms.

4. Using the Calculator

Tips: Enter your best estimates for each factor. For accurate results, check your actual credit report from Equifax, Experian, or Illion.

5. Frequently Asked Questions (FAQ)

Q1: What's a good credit score in Australia?
A: Scores above 622 are generally considered good, with 833+ being excellent on the 0-1200 scale.

Q2: How often should I check my credit score?
A: At least once per year, or before applying for significant credit like a home loan.

Q3: Do credit inquiries really affect my score?
A: Yes, multiple applications in a short period can lower your score, as it may indicate financial stress.

Q4: How long does negative information stay on my report?
A: Most negative information stays for 5-7 years, depending on the type of default.

Q5: Can I improve my score quickly?
A: Some factors (like utilization) can improve quickly, while others (like credit age) take time.