What is the perfect credit score and how do I get it?



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Credit scores are calculated by private credit reporting bodies, so the perfect credit score varies from organisation to organisation.

There are three companies in Australia that calculate credit scores:

  • Equifax (perfect score = 1,200)
  • Experian (perfect score = 999)
  • Illion (perfect score = 1,000)

Each of these credit reporting bureaus uses a scoring system with five different tiers:

Tier Equifax Experian Illion
1 Excellent = 833 to 1,200 Excellent = 961 to 999 High end = 800 to 1,000
2 Very good = 726 to 832 Good = 881 to 960 Great = 700 to 799
3 Good = 622 to 725 Fair = 721 to 880 Average = 500 to 699
4 Average = 621 to 510 Poor = 561 to 720 Room to improve = 300 to 499
5 Below average = 0 to 509 Very poor = 0 to 560 Low = 0 to 299

Case study

John wanted to get a credit card for his overseas holiday, which was due to start in 15 days. He was worried that his new card wouldn’t arrive in time, so he decided to maximise his chances by sending applications to six different banks. His plan was to use whichever card arrived first and to cancel the others when he returned from his holiday.

What John didn’t realise, though, was the damage this would do. That’s because his credit file now showed that he’d made six credit card applications in a hurry – just the sort of thing someone does if they’re bad at managing money. It didn’t matter that John cancelled the five extra cards when he got back home – the negative act remained part of his credit history.

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How to get a good credit score

To understand how to get a good credit score, you first need to understand the thinking behind the system.

A credit score is a number that indicates how credit-worthy you are, based on your history of paying rent, phone bills, credit card bills, car loans – indeed, any sort of loan.

As a general rule, lenders believe that Australians with higher credit scores are less of a risk than those with lower credit scores. So they regard the first group as more desirable customers than the second.

Here is how lenders and other credit providers tend to assess Australians:

Higher credit score Lower credit score
Better track record of managing loans Worse track record of managing loans
More stable and responsible Less stable and responsible
More likely to repay a loan Less likely to repay a loan
More likely to have a loan approved Less likely to have a loan approved
More likely to qualify for the best deals Less likely to qualify for the best deals

If you want to get a good credit score, you need to establish a history of using credit responsibly. That means doing these three things:

  1. Limiting your number of credit applications (applying for one credit card is better than applying for five)
  2. Paying bills on time (aim to pay all your bills by the due date)
  3. Paying off loans (aim to make every repayment by the due date and to pay off the entire on schedule)

Australia has a system known as comprehensive credit reporting, which means that credit reporting bureaus weigh up both positive and negative acts when calculating your credit score. (Before comprehensive credit reporting was introduced, in 2014, only negative acts were considered.)

To get a tier-one credit score, you need the ratio of positive to negative to be as high as possible. That means:

  • Doing one positive act after another, over the long term
  • Minimising – or even eliminating – negative acts
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The reason Equifax, Experian and Illion use different scores is because they are independent companies with their own different methodologies. As a result, a score of, say, 700 would mean different things at different credit reporting bureaus.

However, the one thing they have in common is that they divide their scores into five tiers. So if you receive a tier-two credit score from one bureau, you will probably receive a tier-two score from the others, as well.

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