Credit score
A number summarising your credit history, used by lenders to judge how reliably you repay.
Credit reporting bodies maintain a file on your borrowing history — credit applications, repayment behaviour, defaults and court judgments — and condense it into a score.
Australia uses comprehensive credit reporting, so on-time repayments are recorded as well as missed ones. Consistent good behaviour actively builds your score rather than merely avoiding damage.
Applications themselves leave marks. Several loan or card applications in a short period signal stress to lenders, which is why shotgunning applications is counterproductive.
Scores differ between reporting bodies because each holds slightly different information and uses its own model. A lender may see a different number from the one you checked, so treat the score as a guide to your position rather than a precise figure.
Why multiple applications hurt
Applying to five lenders in a month leaves five enquiries on your file. Even if none proceed, the pattern reads as someone repeatedly seeking and possibly being refused credit.
The bit people get wrong
Checking your own score does not damage it. Only applications by lenders count as enquiries, so there is no reason to avoid reviewing your file regularly.
Common questions
How do I check my credit score for free?
You are entitled to a free copy of your credit report from each reporting body annually, and several services provide scores at no cost.
How do I improve it?
Pay everything on time, reduce credit card limits you do not use, avoid unnecessary applications, and correct any errors on your file.
How long do defaults stay on file?
Defaults generally remain for five years and serious infringements longer. Repayment history information is retained for two years.