You're earning good money so what's next? Most people would probably say they'd want to buy property if they haven't already done so. But whether it's your first property buy or your next, it's important to understand how your credit score affects your borrowing power.

If you're doubting your chances of getting a speedy loan approval, you're not alone. A study, commissioned by Credit Card Compare, found that despite 8 in 10 Australians considering themselves to be good with their finances, most Australians are not aware of the important role a credit score plays in their loan applications.

Melanie Cunliffe, Credit and Lending Adviser at Indigo Finance, explains, “The reality is that credit files are confusing, and Australians don’t understand that it is more than just credit card data that is filed with lay-by services - and interest free facilities also affect a credit score.”

Ways to improve your credit score:

  • Pay all your bills on time. From July 1 last year, banks are required to provide a ‘positive score’ for account holders who are good at managing their bills. This means it’s not just about your ‘negative score’ (points you lose when you have overdue bills) but your ‘positive score’ will also help your bump up your borrowing power.

  • Find out your credit score. One of the free online tools available in Australia was created by online comparator www.creditcompare.com.au. Check the other links below.


  • Or download the website’s app on your mobile phone to monitor it regularly.

What is a good credit score?

Among the credit rating companies in Australia are illion, Equifax and Experian. An individual’s credit score can range from 0 to 1,000 (or 1,200 for Equifax). The average score is anywhere between 500 – 699. To get easy loan approval, you need to have a credit score of 700 points or more. You can find out more about the different scores on this site.

Where to get your credit score for free

To find out more about credit scores, check out the government site MoneySmart.

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