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What is a credit score?

Lenders use your credit score to assess your mortgage application. Your credit score is based on your credit file and information you provide in your application. It will vary from lender to lender, according to their loan criteria.


A lender uses a credit score to determine a borrower’s risk profile. In Australia this is made up of two numbers:

  • one from an individual’s credit file,
  • the other from the lender itself determining how well the applicant meets their lending criteria.

How is my credit score calculated?

All the information about your credit history is available in your credit file. This information is analysed using the Equifax Credit Score – a model that predicts the risk a lender would take in lending you money.

Once you submit an application for a home loan, the lender will request your credit file. They use its rating to calculate your overall credit score alongside other key details from your application:

  • income,
  • assets,
  • living costs, and
  • outstanding debts.

What is considered a good credit score?

Most lenders will not allow you to see the credit score that they give you; they will only advise you on the outcome of your application.

However, you are able to access the credit score from your credit file. This ranges from 0 to 1200. Higher scores indicate lower credit risk. A score of 700 and above is considered ‘good’.

What type of information does my credit file contain?

Your credit file contains information from credit providers and the public record. It will include:

  • Personal identifying information;
  • Repayment histories on credit cards, loan and mortgages;
  • Types of credit you already have;
  • Number of credit enquiries in last 12 months;
  • Default information.

When you request your credit score, you will also receive details on what factors have influenced your rating. This information may enable you to improve your score over time.

How can I check my credit file?

In Australia, you can access your credit file for free once a year by contacting one of the following Credit Reporting Bodies (CRBs):

See the Office of the Australian Information Commissioner for more details on how and when you can access your credit report.

Requesting a copy of your credit file will not hurt your credit score. Further, it could be worthwhile to check your credit history is accurate and not compromised by errors or an identity fraud.

You can also order a free credit file from My Credit File, and set up credit alerts so you don’t run into issues just as you’re trying to get finance.

How can I raise my credit score?

You can improve your credit score with good financial management:

  • Pay all your bills on time;
  • Settle any defaults;
  • Avoid applying for credit you don’t need;
  • Be wary of applying for credit with less reputable lenders (this may indicate financial distress and negatively impact your rating).

Managing your finances well before you apply for credit will increase your chances of getting approved.

How do lenders calculate my credit score?

Your credit score from your credit file will remain the same – at a point in time – regardless of which lender you choose to apply for a home loan with. However, your overall credit score will vary from lender to lender.

Lenders calculate this score not only by the information on your credit file, but also on the information you provide in your application. Each lender has a different method of determining this score – so some may assess you more favourably than others.

An uno adviser can look at your personal circumstances and advise you on which lenders are more likely to approve your application. This can help you avoid having your application rejected and protect your credit file from the negative effects this could have on it.

What results might I get?

A lender takes information from your application and credit file and uses their own algorithms to calculate your credit score. They will base their decision on this computer-generated result, which could be: 

  • Pass – your credit score is good and you should be able to secure a home loan.
  • Decline – your credit score is lower than it needs to be, so lenders will decline your application on the spot.
  • Refer – the computer was unable to calculate your credit score, either:
    • The information you provided was incomplete, or
    • Your credit score is stuck between a pass and a fail.

If your application receives a referral, there’s still a possibility of getting your home loan application approved. It will be forwarded to a credit manager to assess it manually.

What to do next

  • Use our calculator to determine your borrowing power.
  • Reach out to one of uno’s mortgage brokers.

With Alexi Neocleous

The information in this article is general in nature. Please seek advice from a licensed professional when making financial decisions.

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Caroline Roberts

Caroline is a freelance writer and editor for the business, finance and not-for-profit sectors. She has written extensively on financial matters and has 10 years' experience working as a communications professional within financial services.

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