What Is A Good Credit Score For Expats In Australia?
Before arranging a loan (personal loan, home loan, etc.), expats need to know their current financial standing; this will inform them of how much they can borrow for a loan.
A credit score gives you and loan providers an idea of your reliability as a borrower. You will get a score and a rating to indicate your financial standing and how reliable you appear to lenders.
Continue reading our expat credit score guide to find out what a good credit score is for an expat in Australia. Additionally, you will learn what a bad credit score is for expats, what affects a credit score, how you can improve a credit score, what credit bureaus you can use, and more!
What Is A Credit Score?
A credit score indicates how much credit a person has; credit can inform lenders of a person’s trustworthiness. For example, potential lenders are unlikely to offer you a loan if you have a bad credit score.
A credit bureau will base your credit score on your credit history. If you have bad credit history (high debt levels, poor repayment history, the number of open credit accounts and savings accounts, etc.).
A credit score is vital to lenders because it gives them an excellent indication of how likely it is that they will complete their loan repayments on time.
Get a free Australian mortgage assessment today.
What Is A Credit Report?
A credit report is a detailed search of your credit history. Specifically, it details your debt repayment history. Your credit report provides lenders with a more detailed look into your credit history to determine if you have a good payment history (avoiding late payments). As a result, our credit report is a crucial element that bureaus use to calculate your credit score.
Here is what is in a regular credit report.
- The personal details section includes your full name, current address, any current or past employers you have, and any people who are your joint credit applicants (if you chose joint credit).
- The accounts section will display your open credit card accounts and any open loans (a home loan, for example. Additionally, you can find your closed accounts (credit accounts and any loans you paid in full). Other potential information includes foreclosures and repossessions.
- The inquiries section contains records of entities requesting your credit report. These inquiries can last on your account for two years.
- The public records section includes civil judgements, bankruptcies and more–these last on your credit report for ten years.
Australian Credit Score Table
Here is a table representing the various credit score ranges and their meaning.
Credit Score | For what reasons do you have this credit score? | A lender’s interpretation of this credit score. |
Between 1000 and 1200 | If you have this credit score, you have a perfect score (1000 for an Illion credit and 1200 for an Equifax credit score). To get a perfect credit score, you need to make payments on time, fully pay off loans, and keep your credit utilisation low. You need to do these things over a long period. | Lenders will love this credit score to the extent that you may be able to negotiate a lower interest rate. |
Between 800 and 999 | While not a perfect score, a score in this range is still fantastic and shows you have a reliable history of credit (good repayments, low utilisation, etc.). | With this range, you can get competitive loan terms and rates. |
Between 700 and 799 | If you have a credit score in this range, you have an above-average score, meaning that you make payments on time, but you need to do it for longer to improve your score. | You will be able to get loan rates that will satisfy you, but you won’t be able to get the competitive rates you get from a score between 800 and 899. |
Between 500 and 699 | The average score in Australia. If you have this score, you need to continue your positive credit history for longer. Fortunately, it also means that you haven’t had any credit lowering issues (tax defaults, etc.) | It’s more challenging to secure a larger loan with this credit score. However, you can get large loans depending on the loan provider’s policies. |
Between 300 and 499 | If you are in this score range, you need to make several improvements, like making sure you make all payments and repayments on time. | You need to improve your score; loan providers consider this score range a risk. |
Between 0 and 299 | If you are in this range, you have a bad credit score. This is because you fail to pay bills on time and use too much of your monthly credit limit. Additionally, you might have a limited credit history with this range. | If you have a bad credit score, you are unlikely to get a large loan. |
What Is A Good Credit Score For Expats In Australia?
A good credit score for an Expat in Australia starts at 700. If you have a lower score than this, you either have an average or bad credit score. Some loan providers have specific policies and restrictions for expats, so having a high credit score is essential to get a competitive rate for a loan.
If you’re an expat, you can achieve a high credit score by making payments on time and not overspending your credit limit.
What Is A Bad Credit Score For Expats In Australia?
A Bad credit score for an Expat in Australia is a credit score below 500. You might have this credit score for several reasons, including having a limited or poor credit history. You can get a low credit score from missing payments or spending too much of your credit limit.
Additionally, you will have a lower score if you don’t use credit cards.
If you have a bad credit score, you are unlikely to get a large loan, so you need to improve it by making payments on time and lowering your utilisation level.
Get a free Australian mortgage assessment today.
What Can Affect An Expat’s Credit Score?
You must remember that every credit bureau has specific criteria that affect their decision on your credit score. However, some general elements affect your credit score, including:
- Your payment history: Your score will be lower or higher depending on when you make your payments. If you complete all payments and repayments on time, you will have a higher credit score.
- Loan and credit applications: The number of credit applications and loan applications you have will affect your credit score. For example, you won’t have a good credit score if you open too many credit applications for products (with credit card companies, for example).
- Public records on your credit report: Public records are something you don’t want to see on your credit report. If a lender finds these on your credit report, it can dramatically lower your credit score. Examples of public records include civil judgments, bankruptcies and more.
- Credit History: Credit history is a substantial factor lenders consider when checking your credit report. For example, if you have a minimal credit history or have a poor history, you will receive a bad credit score and credit rating.
- Personal information: Personal information on your credit report can affect your credit score, such as how old you are, your home address and your current occupation and place of work.
What Does A High Credit Score Mean For An Expat?
Having a good credit score can benefit an expat for many reasons; a good credit score will make any credit application easier and provide more opportunities for expats. Some of the benefits an expat in Australia can get from having a good credit score include:
- You can get a discount on home loans with a higher score because lenders will be more willing to negotiate with you. If you have a very high score of over 800, you can find excellent loan terms and rates.
- You can borrow more money (with a high credit score) if you negotiate with a loan provider.
- If you’re an expat renting in Australia, having a higher credit score can help you get rental approval from landlords. If you have a high credit score, landlords will trust you more and move you to the top of their renting list.
- You can acquire a credit card with reward options if you have a high credit score. Reward options can include discounts on various activities and venues, including flights. They also include rewards points that convert into cash. Rewards credit cards require a high credit score, and they have a high price.
- You can acquire a peer-to-peer loan and get an excellent interest rate. A peer-to-peer loan is a loan type that bases its interest rate on your credit score; if you are an expat with a higher credit score, you will pay less interest (you need a very high credit score to make this worth it). Therefore, this is a fantastic idea if you have a high score.
How Can An Expat Improve Their Credit Score?
An expat in Australia can get a low credit score from missing payments or spending too much of their credit limit. However, if you are an expat with a low credit score, there are several ways you can improve it.
Some of the ways expats can improve their credit score include:
- Make your payments and repayments on time. If you don’t make payments and repayments on time, lenders will find you untrustworthy, and you will receive a low credit score.
- Check your credit report for mistakes, misinformation and errors and report them if there are any to avoid your credit score decreasing.
- Make sure your credit utilisation level is low. Your utilisation level is the amount of your credit limit you use every month. If you overspend your credit limit, your utilisation level will rise, and your credit score will decrease, so you need to keep your spending low to increase your credit score.
- As well as lowering credit card spending, you can also decrease the limit on your credit card, so you aren’t tempted to spend more on them.
- Get your credit score calculated by a credit provider or credit reporting agency. Additionally, you need to keep checking your credit score to improve it if it decreases.
Get a free Australian mortgage assessment today.
What Credit Bureaus Can An Expat Use To Check Their Credit Score?
Before calculating your credit score, you need to choose a bureau. Many of these bureaus have different advantages and features that set themselves apart. Here are three major credit bureaus in Australia, how to check your credit score with them, and their best features.
Experian
Experian is not only one of the largest credit reporting agencies for calculating credit scores but one of the largest globally. You can acquire a free credit score and a free credit report through Experian.
Experian Features
Some of the best features on Experian include:
- Not only do they offer a free credit score, but they also offer a free credit score boost; this isn’t available on the other credit reporting bodies.
- There is an identity checker feature that can scan to see if someone else is using your online identity. You can daily identity checker reports from this feature.
- Once you have a free score and report, Experian can help you get pre-approval on your loans.
How To Check Your Credit Score On Experian
To check your credit score on Experian, you need to set up an account, verify your ID, and confirm the account. Then you can get your free credit check.
To check your credit score, Experian will look at your credit report, including your previous credit inquiries, the credit products you applied for, your history of payments and repayments, your credit limits and utilisation level, and any public records (bankruptcies, etc.).
Equifax
Equifax is one of the other major credit bureaus in Australia. Unlike the other two bureaus on our list, most Equifax services come under a paid monthly subscription. However, they offer a free version of your credit report once per year.
Equifax Features
Here are the key features that Equifax offers.
- As well as your credit score, they also provide a rating to give you a clear indication of your credit and what your score can get you.
- Their free report is high in detail, with numerous pieces of information, including personal information, credit inquiries and more.
- If you don’t know how Equifax calculates your credit score and want more information, you can read the information on their knowledge centre.
How To Check Your Credit Score On Equifax
Once you sign up for Equifax and verify your identification, they can calculate your credit score.
Equifax will search through your credit report, including your previous credit inquiries, credit products, repayments, credit limits and utilisation level, and public records. Then, they provide you with a credit score and rating.
Illion
Illion provides Australian customers with multiple analytics and data products, including free credit scores. A massive benefit of Illion is that both the credit report and score are free.
Illion Features
Here are the main benefits that Illion can provide for expats wanting to check their credit score.
- The sign-up process and score calculation process are both quick and straightforward.
- Illion has secure encryption to protect customer data.
How To Check Your Credit Score On Illion
You get a free credit check on Illion by signing up, entering your personal information, scanning a copy of your ID for verification, and requesting a credit check.
Illion will then examine your credit report, including your previous credit inquiries, the credit products you applied for, your history of payments and repayments, your credit limits and utilisation level, and any public records (bankruptcies, etc.).
Get a free Australian mortgage assessment today.
Credit Scores For Expats In Australia
In conclusion, an excellent credit score for expats in Australia is a score over 800. With a high score, lenders will be more inclined to trust that you can make repayments.
If you’re an expat with a low score, there are several ways you can improve it, including making your payments on time and lowering your credit card use.
If you want to get your credit score, you can use one of the major bureaus: Experian, Equifax and Illion.
Frequently Asked Questions
How Can Limited Credit History Affect An Expat’s Credit Score?
Credit history is a large factor lenders consider when checking your credit report.
If you are an expat with a limited credit history, you will receive a bad credit score and rating.
However, You can improve your score by making payments and repayments on time and ensuring your credit limit is low and you don’t spend too much of it.
What Is A Good Credit Score For Expats In Australia?
A good credit score for an Expat in Australia starts at around 700. If you have a score lower than 700, you either have an average or bad credit score.
Some loan providers have specific policies and restrictions for expats, so having a high credit score is essential to get a competitive rate for a loan and get discounts on the terms and rates.
What Is A Bad Credit Score For Expats In Australia?
A Bad credit score for an Expat in Australia is a credit score below 500. You may have this credit score for several reasons, including having a limited or poor credit history.
You can get a low credit score from missing payments or spending too much of your credit limit.
Additionally, if you don’t use credit cards, you will have a lower score.
What Credit Bureaus Can An Expat Use To Check Their Credit Score?
There are three primary bureaus that an expat can use to check their credit score in Australia: Experian, Equifax and Illion.
These bureaus will search your credit report, including your previous credit inquiries, credit products, repayments, credit limits and utilisation level, and public records. Then, they provide you a credit score.
What Is The Average Australian Credit Score?
The average score range in Australia is between 500 and 699. If you have an average score, you need to continue your positive credit history for a more extended period by continuing to make payments on time and keep your credit utilisation low.
Additionally, having the average score means that you don’t have any problems that lower your score (missing payments, etc.).
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