What is a credit file?
A credit file is a record of your borrowing history. It includes details like your name, date of birth, current and past addresses, loan amounts, and borrowing and repayment history.
When you apply for a loan, banks, credit unions and financiers in Australia report relevant information. Credit information is compiled by agencies such as Equifax Australia or Dun & Bradstreet.
What is a credit score?
A credit score is a calculation based on your personal credit history which gives financiers an idea of your ability and likelihood to repay a loan.
Different financiers calculate credit scores in different ways, which is why one credit provider might approve a loan and another might decline it.
A financier may ask you about your borrowing history, to better understand your personal situation.
Does my credit score matter?
Yes. A good credit score means financiers will look more kindly on lending you money, whether it's for a car, credit card, home or any other type of loan.
Can I improve my score?
Yes, you can take action to make your credit score healthier.
How to improve your score
- Always pay your bills on time.
If a debt collector gets called in for a late bill, it can impact your credit rating. - Keep your credit card debt low.
A higher credit card limit can affect your credit rating. Accepting pre-approvals can affect this. Find out as much information as you can before you apply for a loan. - Keep loan applications to a minimum.
For each loan application the lender will do a separate credit check. - Check your own credit file.
Access your credit file, as you can dispute any errors that might be affecting your credit score. For more information search Equifax Australia or Dun and Bradstreet, and follow the links on their website.
Before you buy
Check in with the RAC Finance team before settling on your big purchase. It pays to get a pre-approval, so you’ll know exactly what you can afford to spend.
