Credit Scores 101 [Infographic]

Posted in Getting Started

Have you been wondering what makes up your credit score? Or why it's important? Our handy visual guide outlines on who might be interested in your score, how it's calculated and what can cause a default to occur on your credit file.

Who looks at your credit score?

These are just some of the places:

Credit Scores 1Credit Scores 2Credit Scores 3

  Your credit score is important as many lenders use it to understand your past credit profile. 

It can determine your abillity to:

Credit scores 4Credit scores 5Credit scores 6

How is your score calculated?

Your credit score can be affected by a range of factors, including:

Credit Scores 7Credit Scores 8Credit Scores 9Credit Scores 10Credit Scores 11Credit Scores 12

4 facts on defaults

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Credit scores- by the numbers

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View the accessible text version of the infographic below or download the PDF version.

Who looks at your credit score? These are just some of the places:

  • Banks
  • Rental agents
  • Insurance companies

Your credit score is important as many lenders use it to understand your past credit profile. It can determine your ability to:

  • Get a home loan or credit card
  • Obtain insurance
  • Connect electricity or gas
  • Rent a house

How is your score calculated? Your credit score can be affected by a range of factors, including:

  • Numerous credit enquiries in a short time frame
  • Nominations to be a guarantor
  • Overdue debts and defaults (listed for 5 years)
  • Bankruptcy (listed for 10 years and under)
  • Late payments for mobile phones, electricity and gas services
  • Interest-free store finances
  • Court writs or judgements

Don't have your credit report? Get it free from a credit reporting bureau such as Equifax (previously known as Veda).

4 facts on defaults:

  • Fact #1: You can default on credit card payments, mortgages or even bills
  • Fact #2: Lenders issue a default notice when you fail to pay debt that is due
  • Fact #3: Legally, lenders must contact you multiple times to chase up your payment
  • Fact #4: If you still fail to repay the amount, a default could be listed on your credit file.1

Received a default notice? Keep calm. Just because you receive a default notice, It does not mean it will be listed on your credit report

Credit scores - by the numbers

  • 80 is the percentage of Australians who have never accessed their credit report.2
  • $150 is the minimum amount of debt for a consumer default notice.3
  • 60 is the number of days overdue before a consumer payment default can be listed.4
  • 5 is the number of years defaults and credit applications can stay on your report.5
  • 30 is the percentage of Australians who accessed their report and found mistakes on it.6

For more information, speak to a friendly Lending Specialist on 13 73 77 Monday to Friday between 8:00am and 6:00pm.

Interested in learning more? Take our What's your credit rating IQ? quiz or read our 7 fast facts about credit scores.

Sources:
1. www.oaic.gov.au/privacy/privacy-archive/privacy-resources-archive/when-can-a-default-be-listed-on-my-credit-file
2. www.choice.com.au/money/credit-cards-and-loans/home-loans/articles/how-to-protect-your-credit-rating
3. http://www.equifax.com.au/personal/aricles/what-looks-bad-my-credit-report
4. www.moneysmart.gov.au/borrowing-and-credit/borrowing-basics/credit-reports
5. www.choice.com.au/money/credit-cards-and-loans/home-loans/articles/ how-to-protect-your-credit-rating
6. https://www.pepper.com.au/lending/help-centre/getting-started/7-fast-facts-about-credit-scores

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