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

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.

### 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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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.

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

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.

Why should I check my credit rating?

There are two reasons you should check your credit rating: so you have a better understanding of your financial position, and so you can take action (if necessary) to improve your credit rating.

Lenders use credit ratings or credit scores to assess loan applications. The higher your score, the more likely you are to get approved, and the more likely you are to be charged lower interest rates and lower fees. Conversely, the lower your credit score, the less likely you are to get approved, and the more likely you are to be charged higher interest rates and higher fees.

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.

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.

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.

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 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.

Increase your credit card limit with Westpac

You can apply to increase your Westpac credit card credit limit at any time, and most credit card providers have made it really easy to do so. You can use your online banking portal, the credit card provider’s mobile app, or even the telephone.

Applying online to increase your credit limit with Westpac is the easiest option if you’ve already activated Westpac Live Online Banking. All you need to do is fill in the required information and then hit ‘submit’ to apply for an increase in your credit card limit.

Most banks will ask for details of your financial situation at the time of applying for a credit increase. This is done to ensure your new limit meets the lender’s criteria.

You can apply for increasing your credit limit in any of the following ways:

1. Visiting your nearest Westpac branch
2. Calling Westpac on 1300 651 089
3. Logging in on Westpac Live Online Banking

How to increase the NAB credit card limit?

If you use your NAB credit card regularly, you could consider requesting a higher credit limit. The good news is that it's fairly easy to do so using either the NAB app or NAB internet banking.

NAB app:

• Step 2: Select the ‘My Cards’ menu.
• Step 3: Select the card you want to increase the credit limit for.
• Step 4: Select ‘Usage Controls’ and then click on ‘Change Credit Limit’.

NAB internet banking:

• Step 2: Choose the ‘My Cards’ menu.
• Step 3: Choose the card for which you want to increase the limit.
• Step 4: Choose ‘Change My Credit Card Limit’.

If you don’t have the NAB app or cannot access NAB internet banking, you can even visit your local branch or call their contact center.

Once you’ve applied to increase your NAB credit card limit, you’re likely to be asked for your

• current employment details
• total income, before and after-tax deductions
• assets, liabilities, and expenses information

NAB will then assess this information to determine if your current financial situation suits the increased credit limit request, and your application will either be accepted or denied.

However, this process will only work if you’re attempting to increase your personal NAB credit card limit. For a business credit card, you can contact the NAB Corporate & Business Servicing team or speak to your NAB relationship manager.

How can I increase my Bankwest credit card limit?

When you apply for a Bankwest credit card, you get assigned a pre-set credit limit, which will end up being the most that you can spend on your credit card before having to pay it off. Your credit limit is chosen for you and your current financial situation, and you should remember not to overspend, irrespective of the limit, in order to avoid racking up a massive bill.

However, banks and lenders understand that your needs will change, and have made it possible for you to increase your credit card limit, allowing you to get extra cash when you need it most. Moreover, with a higher spending limit, you may be able to get access to certain perks and benefits with your Bankwest credit card.

To increase your Bankwest credit card limit, you can visit any of the bank’s branches or call 13 17 19 and follow the steps outlined.

What does ANZ credit card insurance cover?

ANZ offers complimentary insurance on some of its credit cards, which can provide some protection against unforeseeable incidents, like the theft of your card. Depending on the type of credit card you own, you may be eligible for different insurances. For instance, most ANZ credit card customers may qualify for Purchase Protection Insurance and Extended Warranty Insurance. Customers who own premium credit cards may also be eligible for Guaranteed Pricing, Rental Vehicle Excess, International Travel, and so on.

Consider checking your ANZ credit card insurance features listed in the Insurance Policy Information booklet to know which items are covered. Also, while ANZ issued the credit card, they are not the insurer. For this reason, you may need to send your insurance claims - and get your ANZ credit card insurance refund - to the insurance provider.

How do I apply for a BOQ credit card limit increase?

If you’re an existing BOQ customer, you can request a BOQ credit card limit increase over a phone call. However, you should remember that owning and using a credit card is a matter of financial responsibility, so it might be worth thinking this decision through.

When requesting a credit card limit increase, you’ll need to be just as responsible in terms of how much you earn and can set aside to repay the outstanding card balance. A credit card company may approve a credit limit increase only if you can show that you have either the income or the disposable income, which is the amount you have left after all expenses have been paid out.

For this purpose, you may need to submit your latest income documents and bank statements for an increase. You may want to estimate how much you usually have left after deducting your expenses, and then use this amount to try and convince the credit card company. Also, you may prefer to pay off the card balance in full each month and thus avoid paying interest on the card, helping you back up any claims of financial responsibility, as well.

Remember that you may not be able to apply for a credit card limit increase beyond any limitations on the type of card you own. For instance, if you own a card whose ceiling is \$10,000, and your current limit is \$5,000, you won't likely be able to apply for a \$10,000 credit card limit increase.