What Is a Credit Score and Why Should You Care?
Your credit score is one of the most important numbers in your financial life — but most people don’t even know what theirs is!
What Is a Credit Score?
A credit score is a number that represents how trustworthy you are with borrowing money. It’s based on your history of paying bills, repaying loans, and managing credit products (like credit cards or phone contracts).
In Australia, your credit score usually ranges from 0 to 1,200, depending on the credit reporting agency.
800+ = Excellent
700–799 = Very Good
500–699 = Average
Below 500 = Needs Improvement
Why Should You Care About Your Credit Score?
Your credit score affects far more than just loans. It can impact:
Whether you get approved for a home or car loan
The interest rates you’re offered (higher scores often mean better rates)
Approval for things like phone plans, rental applications, or utilities
A low score can mean paying more for the same things — or even being declined for financial products.
What Affects Your Credit Score?
Several key factors go into calculating your score:
Payment history: Do you pay your bills on time?
Credit usage: Are you maxing out your credit cards?
Credit applications: Have you applied for multiple loans recently?
Defaults or missed payments: Even one late payment can stay on your report for years.
Length of credit history: The longer you’ve been responsible with credit, the better.
3 Ways to Improve Your Credit Score
Always pay bills on time — even small amounts like phone plans or streaming services.
Keep your credit card balances low — aim to use less than 30% of your limit.
Check your credit report regularly — you can request a free report every year to spot errors.
Want to Learn More?
Credit can feel confusing — but it doesn’t have to be. Our “How Credit Works (And Why It Matters)” course breaks down everything you need to know about credit scores, myths, and how to build healthy credit for the future.
