What is a credit score?

Settle in as we demystify the elusive credit score. Your credit score is a number that demonstrates how well you manage your finances. It helps a lender determine how responsible you are with borrowing and repaying credit.

What's in this guide?

What are credit scores used for?

Credit providers such as banks and lenders use your credit score to determine whether or not it's a good idea to lend you money, as well as how much money is safe to lend you. The score can also determine your interest rate.

How are credit scores calculated?

Australia has four main credit bureaus: Experian, Equifax, illion and the Tasmanian Collection Agency. Each credit bureau collects your personal and financial information and details it on your credit report. They take all of this information and come up with your credit score. 

This includes: 

  • Your personal information, such as your name, address, date of birth, etc

  • Your total amount of credit already borrowed

  • The types of credit providers you've had experience with, such as utility companies or banks

  • Whether or not you have any overdue, unpaid or defaulted credit or loans 

  • The number of credit enquiries and applications you have on your record

  • Whether or not you have made debt agreements in the past or any other agreements related to filing for bankruptcy

What do my credit scores mean? 

Since each credit bureau uses a different scale to report your credit score, you'll end up with a number from zero to either 1,000 or 1,200. Remember that you may have multiple credit scores, and if you check your scores with Wisr, we will present you with your Equifax and Experian scores.

In some cases, you may see a negative credit score, i.e. less than zero. This occurs in rare circumstances, such as if the credit bureaus think you're, umm, dead or if you declare bankruptcy. You can read more about negative credit scores in the Help Centre under the heading 'Your Credit Standing'.

What's a good credit score?

Equifax and Experian use a five-tier grading system, covering categories similar to below average, average, good, very good and excellent. Where your credit score falls in this range helps financial institutions decide how risky it is to lend money to you. 

They include:

  • Excellent – An excellent credit score means that it is very unlikely that you will get into any trouble that could drop your credit score in the next year. 

  • Very Good – A very good credit score means that it is unlikely that you will get into any trouble that could make your score slip. 

  • Good – A good credit score means that it is slightly more unlikely than likely that you will get into trouble with your credit in the next 12 months. 

  • Average – An average credit score means that it is likely that you will have issues with your credit in the next year. 

  • Below Average – A below-average credit score means that it is extremely likely that you will get into trouble in the next year.

How do I check my credit scores?

You can check your credit score for free and as often as you want with Wisr.

You only need to provide limited information such as your full name, date of birth, and driver's licence so we can ID you and some additional personal information such as your living arrangements.

Get your info ready and give it a crack!


What is a credit score?

A number that demonstrates your creditworthiness.

How are they calculated?

Using a combination of credit enquiries, accounts, repayment history and other information.

What are they used for?

To help a lender determine if they should lend you money, how much and at what rate.


How do I improve my credit scores?

There's always room for improvement when it comes to keeping your credit health in check. Yep, even a great credit score can be improved! Here are a few things you can do to lift your scores:

  • Avoid making too many credit enquiries and applications

  • Pay your bills on time

  • Avoid defaults and missed payments

  • Review your credit report regularly and correct errors ASAP

  • Consolidate any high-interest debt that's bogging you down.

Check out our full guide to what credit scores are used for.

Now that I know my scores, what can I do with them?

Your credit score is important because many big life purchases for example, a car or home usually requires a loan. The better your credit score, the better your likelihood of getting approved and snagging a lower interest rate.

A good credit score over a lifetime can not only save you tens or even hundreds of thousands of dollars, but it can improve your overall quality of life. Protect your credit rating because it is literally money in your pocket.

How do I check my credit scores for free?

You can check your credit scores for free with Wisr. We do a 'soft check' which doesn't negatively impact your credit scores. All you need to do is create a Wisr profile, visit the dashboard and generate your credit reports. You can also check and track your scores in Wisr App on iOS or Android.

You'll receive scores from Equifax and Experian – two of Australia's major credit bureaus. They'll be slightly different, but don't worry. That's normal! If you spot anything amiss or don't see your credit scores, get in touch.

Are credit score apps safe?

At Wisr, they certainly are. Most credit score providers use secure platforms to store and share your credit file information with you. Levels of security vary, but you should always be mindful to use secure passwords and log out of any public devices you might be using. 

Are credit scores and credit ratings the same thing?

Tomato, tomato. If you read that in your head the same way we did, you’ll know what we’re getting at. A credit score and a credit rating are one and the same. If you watch a lot of American movies or TV shows, you’ve probably heard it referred to as a credit rating, but in Australia, we usually refer to it as a credit score.

How do you get a credit score in Australia?

As soon as you start engaging in credit products, such as phone contracts, loans or credit cards, you’ll pop up on the credit bureaus’ radar. From then on, they’ll begin recording your financial activity. It sounds sinister, but it’s something that happens to everybody. The information the bureaus collect is only used for specific purposes, such as assessing your eligibility for a credit product.

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Disclaimer: This article contains general information only, and is not general advice or personal advice. Wisr Services does not recommend any product or service discussed in this article. You must get your own financial, taxation, or legal advice, and understand any risks before considering whether a product or service discussed in this article may be appropriate for you. We have taken reasonable efforts to ensure that the information is accurate at the time of publishing, but the information is subject to change. We may not update the article to reflect any change.

James is a marketing and communications professional with a passion for leading high-performance teams. He likes what he does… a lot.

James, Chief Growth Officer