What happens if you don't have a credit score?

What happens if you don't have a credit score?

If you’re a young Australian looking to take out a loan or credit card, you may be struggling with the fact that you haven’t built up a credit history.

This is not uncommon, as it can take some time to grow up your credit score. But it can be frustrating for Aussies who feel like they need credit to build credit.

So, what happens if you don’t have a credit score? And how can you build up your credit history without risking falling into debt? Here are some helpful tips to guide you through developing your credit score.

What a credit score does

When you want to borrow money from a bank in the form of a loan or credit card, the bank will need some sense that you can keep on top of your bills, pay back this money and not fall into debt. This is where a credit score comes in.

Your credit score indicates your trustworthiness as a borrower. It is based on your credit history, which is an outline of:

  • Money you’ve borrowed;
  • Any credit applications you’ve made; and
  • Paying your bills on time. 

A high score shows credit providers that you are a reliable borrower and should be able to pay back a loan in a timely way. Not only does this mean you are more likely to be approved for financial products, some providers reserve their most competitive interest rates for Australians with excellent credit scores. For example, someone with an ‘excellent’ credit score may receive a lower home loan interest rate than someone with only a ‘good’ credit score.

How to check your credit history and credit score

Your credit history is stored on your credit file and can be viewed through one of the Australian credit reporting bureaus. These include Equifax, Experian and Illion. Credit reporting bureaus allow Australians one free copy of their credit report each year, so if you’ve never looked your credit history, now is the time.

 Here is Equifax’s credit score scale:

  • 833 - 1200: Excellent

You’re a reliable borrower and among the top 20 percent of the credit-active population of Australia. Your odds of keeping a clean file are five times better than the average Equifax credit-active population.

  • 726 - 832: Very good

Although you may have had your share of financial misses or have not had time to build a credit history, you still have a decent score. Your chances of keeping a clean credit report are two times better than the average Equifax credit-active population.

  • 622 - 725: Good

Your odds of keeping a clean credit report are better than the average Equifax credit-active population. It’s less likely you will face an adverse event in the next 12 months.

  • 510 - 621: Average

It’s likely that you might experience an unfavourable event such as a default, bankruptcy or court judgment in the next 12 months.

  • 0 -509: Below average

It's more likely that you will experience an unfavourable event such as a default, bankruptcy or court judgment in the next 12 months.

There are some financial websites that do provide you with just your credit score. RateCity can help you to get a free copy of your credit score. All you’ll need is to provide some basic personal identification details, and your score will be sent to you.

How to grow your credit history from nothing

Whether you’re trying to get your first credit card, or looking to take out a car loan, there are a few ways you can grow your credit history and build up a credit score without borrowing credit.

  • Utilities bills. If you’ve moved out of home, or if your parents are keen to help you, try and have your name put on a utilities bill, such as gas or electricity. This is a simple way you can show banks you’re reliable with paying bills on time and begin to grow your credit score.
  • Phone plan. Perhaps you’re still on a prepaid phone plan or maybe you’re on your parent’s phone plan. One of the easiest ways you can start your credit history is to begin an independent phone plan under your own name. Just keep in mind that this is a financial responsibility, and not paying your phone bill on time can hurt your credit score. 

If you are comfortable borrowing credit, you may want to consider taking out a low-rate, low-fee credit card. These typically come with easier credit card eligibility criteria to meet, as well as lower rates, fees and credit limits to prevent you growing debt. If you can pay your credit card balance in full each statement period, this is one way you can seriously boost your credit history.

Just ensure you do your research around the eligibility criteria of any financial product you’re considering applying to. Read the product disclosure statement carefully to see any minimum income, employment and credit score requirements. This is crucial for every Australian to do, as applying for any financial product and being rejected will negatively impact your credit score.

Comprehensive Credit Reporting and positive information

Previously, a credit report will only show negative information, as well as basic facts around utilities or money you’ve borrowed. But what about your positive financial information? Australian banks, including the big four, are making the move to Comprehensive Credit Reporting (CCR) to include just this.   

CCR means that when credit providers supply credit bureaus with information about how their customers are managing loans, they will now supply both ‘positive’ and ‘negative’ information. Those with poor credit scores may be able to bounce back quicker thanks to CCR. Further, for those with very little credit history, it may also help you.

This positive information may include:

  • Making all your bill repayments on time for the past year.
  • More information added to files of those with little credit history, such as the type of credit account opened, the date it was opened, the name of the credit provider and current limit on the credit account.
  • Repeated behaviour taken into consideration more heavily than one-off missed payments.

Put simply, comprehensive credit reporting will reward Australians who always pay their bills on time and pay off debts in full, as this showcases a strong level of financial responsibility to credit providers.

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Learn more about credit cards

Do you need a credit card to get a loan?

You do not need a credit card to get a loan, but you usually need to have a credit history. Without a credit history, a financial institution cannot assess your ‘credit worthiness’, or your capacity to pay off the loan.

If you don’t have a credit card, your credit history can reflect any record of paying off an asset. Without any credit credit history, you’re limited in the type of loans you can apply for. But you may be able to obtain a secured loan against an asset. For more information on improving your credit score, go here

How easy is it to get a credit card?

For most Australians, there are no great barriers to applying for and getting approved for a credit card. Here are some points that a lender will consider when assessing your credit card application.

Credit score: A bad credit score is not the be all and end all of your application, but it may stop you being approved for a higher credit limit. If your credit score is less than perfect, apply for the credit limit that you need, rather than the one you want.

Annual income: Most credit cards have minimum annual income requirements. Make sure you’re applying for a card where you meet the minimum.

Age & residency: You need to be at least 18 years old to apply for a credit card in Australia, and most require that you are an Australian citizen or permanent resident. However, there are some credit cards available to temporary residents.

What happens if I have a bad credit score?

If you have a bad credit score, you might encounter two main problems. First, the lower your credit score, the more likely you are to be rejected when you apply for a loan or any other credit product. Second, if your application is accepted, the less likely you are to qualify for the lowest interest rates.

How to increase your Qantas Premier credit card limit

When your income or spending habits change, you might wish to increase your credit card limit. The Qantas Premier credit card allows you to do this over the phone. You can contact Qantas Premier Card Support by calling on 1300 992 700. Unlike some other credit providers, Qantas doesn’t give you the option to increase your limit online.

Qantas will only accept your application if you have a good history of repayment and have not increased your credit or bought another credit product from Qantas in the past six months.

Before approving your Qantas Premier credit card limit increase, Qantas will perform a credit assessment on your current financial circumstances and ask why you would like to increase your credit limit.

To ensure that there are no bumps in your application process, you must provide accurate and recent information about your financial situation. You should also account for any future changes you’re anticipating which could hinder your ability to repay the loan.

Once the assessment is complete, Qantas will either approve or deny your application. If they approve it, you will need to sign a credit limit increase agreement - and you can request a written copy of the credit assessment. However, if your application is rejected, Qantas can opt not to provide a copy of the assessment.

What is the CUA credit card increase limit process?

A credit limit is pre-assigned based on factors like your income, expenses, and debt by the card-issuing company. It varies from time to time based on credit utilisation and changes to your circumstances.

If your income has increased or your liabilities have reduced, you can request for an increase of your CUA credit card limit. You can lodge the request via online banking on the website, or by visiting the closest branch, or by downloading the application form and mailing it. While making the application, you may need to provide information about your income, employment status, desired limit, and the reason for the increase. The card-issuing company will assess your request before approval.

Before you apply for an increase to the credit limit, ensure your bills are paid in full and you aren’t asking for a very steep enhancement.

How can I increase my credit card limit on my American Express card?

If you want to increase the credit limit on your American Express (AMEX) credit card, you will need to apply through the AMEX Online Services, or by calling the number on the back of your card. You may need to share personal information that the bank can use to assess whether the requested limit is suitable for you and your current financial status. Once your application is approved, your new limit will be ready for use within an hour.

How to increase my Commonwealth credit card limit?

Commonwealth Bank credit cards are extremely popular in Australia for everyday purchases and big ticket items alikers. A number of the card’s functions can be customised, depending on your needs and desires. If you wish to increase your Commonwealth credit card limit using the CommBank, you can usually do so on the app or via NetBank.

In the CommBank app, tap on the ‘Cards’ icon and choose your credit card. Then, click on ‘Credit Limit’ and select the ‘Increasing your limit’ option. If you don’t have the CommBank app, you can also increase your Commonwealth Bank credit card limit through NetBank. Simply log on and go to Settings, then click on ‘Product Requests’ and then choose ‘Credit Card Limit Changes’. 

Once the bank has received your application, they will review your account and payment history. Based on this assessment, your application will either be approved or denied. If approved, your new limit will be applied to your card instantly. 

While increasing your credit card limit may be an easy process, it’s important to remember that you should only request limits that you can manage. A high limit increases the risk of having a larger debt, even with cards that provide low-interest rate options. So, it’s important to think carefully and seek advice from people you trust before increasing your Commonwealth Bank credit card limit.

What does Westpac credit card insurance cover?

If you own a Westpac credit card, one of the perks may be  free travel insurance. If you’re eligible, you may be covered if you get sick while travelling, have lost your luggage, have to cancel a trip or have an accident while you’re on the move.

Besides these standard inclusions, the Westpac credit card insurance policy may also cover you for hospital essentials, emergency dental treatment and alternative transport if your original plans go awry. It may also cover loss of income when you get back home after being sick  overseas and your pets’ boarding costs too.

If you have any queries, the Westpac credit card insurance contact number is 1800 091 710. You can submit a claim online.


Can I transfer money from my American Express credit card to my bank account?

If you’re an American Express credit card customer, you may not be able to transfer money from your credit card to your bank account. However, you may be eligible for cash advances, which involves withdrawing money through an ATM. 

To qualify for a cash advance, you’ll likely have to enrol for American Express Membership Rewards. Consider checking your online credit card account to see if you can withdraw a cash advance and, if so, the fees and charges you’ll incur for this transaction. 

You should remember that cash advances are different from balance transfers, which were available with some American Express credit cards earlier. Balance transfers allow customers to consolidate debt from high-interest credit cards to a credit card offering a lower interest rate. If you only recently applied for an American Express credit card, balance transfers may not be available irrespective of the card you own. 

What's the best credit card for rewards?

There is no one-size-fits-all best rewards credit card. It's best you research what type of rewards program you'd like, as well as the fees, interest rate and conditions associated with those types of cards before making a choice. 

Rewards credit cards can also come with high annual fees that may end up nullifying the rewards, so think how often you use the card to decide whether the benefits outweigh the extra cost for you. A card with a lower annual fee might require a lot of spending to get any useful rewards, while another card with a higher annual fee might need fewer purchases to get a reward. 

How many numbers are on a credit card?

The numbers on your credit card actually follow a universal standard which is used to identify specific functions. Each credit card has a different amount of numbers. Visa and Mastercard have 16, American Express has 15 and Diner’s Club has 14. 

The first number on a credit card always identifies what type of credit card it is. Visa cards start with a 4, whereas Mastercard starts with a 5 and American Express with a 3. The remainder of the digits represent the account number, including the last number which is used to verify that your credit card is actually valid. 

Credit cards also have additional verification numbers, which are mainly used when the card isn’t present for phone and online purchases. These are the three-digit numbers on the back of Visa and MasterCard or the four-digit numbers on the front of an American Express card.

How to make a credit card online

If you’re wondering about how to make a credit card online application, here are some steps to follow:

  • Test the market. Many credit card options are available online. Compare providers by fees, interest and perks to ensure you’re getting the best deal.
  • Complete the application. Once you’ve selected a card, head to the provider’s website and complete the online credit card application form. Forms vary by providers.
  • Provide details. Most cards require you to meet age, residency, income and credit status condition, and you need to provide details like a bank account statement to prove this.
  • Review details. Ensure the information you’ve entered is correct.

How do credit cards work?

Think of credit cards as a short-term loan where you use the bank’s money to buy something up front and then pay for it later. Unlike a debit card which uses your own money to pay, a credit card essentially borrows the bank’s money to fund the purchase. When you apply for a credit card, the bank assesses your income and assigns you a credit limit based on what you can afford to pay back. At the end of each billing cycle, which is usually monthly, the bank will send you a statement showing the minimum amount you have to pay back, including any interest payable on the balance.

Where can I get a credit card?

Looking to get your first credit card? You might be confused as to exactly where to go to apply for one. Here’s where to go when you are ready to put in that application.

The bank: Your bank is a great place to start, provided that you have a good banking history. Since you already have a financial history, you have more chance of your application being approved.

Credit card provider: Another option is to apply for a credit card directly from the issuer, such as Visa, Mastercard or Amex. This will most likely be an online application, so do your research and apply for a suitable card for your circumstances.

Major retailers: Coles, Woolworths, Myer and David Jones all have credit cards available. But watch out for the interest rate and annual fees – these cards are designed to help you spend more in store.