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What are the different types of credit scores?

Jodie Humphries avatar
Jodie Humphries
- 4 min read
What are the different types of credit scores?

Your credit score affects how easily you can conduct a variety of financial transactions and what they will cost you, so it’s essential for you to understand your own. It’s one of the tools lenders refer to when evaluating your creditworthiness, which is simply a way to gauge your financial capabilities while approving your loan application.

Your credit score covers your financial history and gives an idea of your borrowing power. Since your credit score is checked for the majority of your financial decisions, it’s important that you take the necessary steps to maintain your credit score as high as possible.

How many types of credit scores are used today?

Different lenders have different credit score models based on their own credit criteria, creating a whole host of credit scores. There are three credit reporting agencies in Australia – Equifax, Experian and illion – that gather your financial information, arrive at your credit score and generate a credit report.

Let’s look at the three types of credit scores in more detail.

  1. Equifax Credit Score
    Your Equifax credit score is a record of your credit information as held by the credit bureau Equifax, and is an indication of how finance and utility providers view your creditworthiness. The credit score range is between 0-1200 and the higher your Equifax Score, the better your credit profile and lenders perceive you to be a lower credit risk.
  2. Experian Credit Score
    The Experian credit score range is a number between 0 and 1,000. A higher score indicates a healthier report and improves your creditworthiness.You can use this as a useful guide to maintain your credit performance and must keep checking it from time to time.
  3. illion Credit Score
    Like the other two credit bureaus, illion alo gathers credit information on individuals and businesses and keeps a record of their credit history. This information is then used to generate elaborate credit reports and credit scores which are shared with potential lenders. Your illion credit score is a number between 0 and 1000.

How are different types of credit scores calculated?

Every credit reporting bureau has its own model and method of calculating credit scores.There are, however, certain key attributes that are used to generate your credit score:

  • The type of credit providers that have made enquiries on your credit report
  • The kind of financial products you have applied for
  • Your repayment history
  • The credit limit on each of your credit products
  • The number of credit enquiries you’ve made
  • Any negative events, such as a default.

Here’s a comparative breakdown of the three types of credit scores:

Credit bandExperianEquifaxIllion
Very good700-799726-832700-799
Fair / Average550-624510-621300-499
Weak / Below average0-5490-5091-129

What events could have an impact on my credit score?

As mentioned before, your credit score is not set in stone and can change with every financial decision and action you take. Here are a few factors that impact your credit score:

  • Payment history – This is the one of the most important criteria assessed. Late payments or defaults can remain on your report for up to five years.
  • Age and type of credit – A short credit history and lack of variety in your credit account mix may not work in your favour, as it gives little information for the bureau to fully assess.
  • Total balances – Includes your total debt, both current and delinquent. As your debt goes lower, your score value increases.
  • Recent behaviour – Here any newly opened accounts and the number of recent hard inquiries are considered.
  • Available credit – The total credit you have available to use.
  • Legal actions – Any court judgements or bankruptcy actions

When you take the right steps to keep your credit score healthy lenders look upon you favourably and the chances of getting approved for further loans are higher.

This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.