Checking Credit Scores and Reports

Most people know that a credit score is important when you’re trying to borrow money, but you might not have a good understanding of how a credit score is calculated, how it can affect your ability to get a loan or credit, and what is included in a credit report.

Learn how to check your credit score and credit report, and how you can fix your credit report if there are any mistakes.

What is a credit score and credit report?

A credit report is a record of your credit history and includes information on your credit history. Your credit score sums up the information in this report and distils it into a numerical score, which represents your reliability to borrowers. This score is important because it influences the amount of credit that a lender will make available to you. It can also affect the interest rate of any loans you want to take out with a lender, and the terms of the contract that a lender offers to you.

How your score is calculated

Credit scores are usually between zero and 850 - 1200, depending on the credit reporting agency. They are calculated based on the information in your credit report, and correlate to a five-point scale that lenders use to measure risk. A higher score means you are in the excellent or very good range and will be considered less risky by the lender. A lower score places you in the average or below average range, and it comes more difficult to get a loan or credit.

How to check your credit score

There are multiple online credit score providers who can deliver your credit score within a few minutes of you signing up to their platform. You will typically be asked to agree to a privacy policy after signing up to the service, but you can opt out of their company’s email marketing after receiving your score. You should never need to pay for your credit score, so avoid any provider that requests money or credit card details.

How often should you check your credit score?

There is no limit on how often you can access your credit score. It’s a good idea to check it monthly, and to check it before applying for a loan or credit card. You should also check your credit score if you suspect that your personal details may have been stolen or that you have been a victim of identity theft.

What’s in a credit report?

Your credit report is a comprehensive report of your credit and repayment history. It includes information on all credit products that you’ve held in the past two years, including credit cards, personal loans, home loans, and more. It will show whether you consistently made repayments on time, or if you were late or missed payments, and it will show any defaults or non-payments, such as on your utility bill. Defaults will stay on your credit report for five years. If you have ever filed for bankruptcy, this information is also recorded on your credit report.

How to check your credit report

There are three main credit reporting agencies in Australia: Equifax, Experian and Illion. You can contact any of these agencies for a copy of your credit report. Getting your credit report is free, but if you do need one in less than ten days (the typical waiting time to receive your report) then you may be charged a fee. You can also get charged if you request more than one copy of your credit report in the space of a year. However, you can request a free copy of your credit report regardless of when you last requested one if you have been refused credit within the past ninety days, or if your credit-related personal information has been recently corrected. It’s possible that different agencies will have different information about you, so you may want to access your report from more than one source.

Fix mistakes in your credit report

Occasionally an error can be made or your personal details can get misused and a mistake will appear on your credit report. If you do notice a loan or debt listed that isn’t yours, or that your personal details such as name and date of birth are incorrect, you can contact the credit reporting agency and ask them to fix it. There is no charge associated with this. You cannot change or remove negative information from your credit report, and it’s important to avoid any company who claims they will do so for a fee.

So there you have it. Your credit score isn’t something to be worried about – it’s just a numerical representation of your credit history, and something that is going to change over time as you take out and pay off different loans, credit cards and more.