Minimum credit score to apply for a credit card in Australia

Sometimes it can seem that getting a new credit card is as easy as picking up a new pair of shoes at the store.

You've got banks advertising all over the internet, friendly-looking salespeople at the shopping centres and attractive credit card offer that seem too good to be true.

What they don't tell you though, is that you might not get approved if your credit score is deemed to be too low. With different reporting bodies offering up multiple standards of measuring your credit score, things can get confusing. Luckily, we've got you covered in this guide.

Minimum score for a credit card Credit score ranges

Quick tips before you read:

• What is a credit score?

  First things first, what exactly is a credit score and where does it come from?

  A credit score is a numerical value that summarises the credit information from your credit report. Your score is an indicator of your overall creditworthiness and may be used by financial institutions to help understand how responsible you are to lend to.

  Credit scores in Australia are calculated by a credit bureau or credit reporting agency. The credit bureaus collect, hold and distribute data from credit providers that relate to a borrower's financial history.

  Scores from each bureau rely on different data and can be calculated differently but in general, they all look at the amount of money you've borrowed, your repayment history and the number of applications for loan products or credit you've made.

• How do I find out my credit score?

  You can learn your credit score by going directly to a credit bureau or by using one of several online providers, including using Finder's free credit score service.

  Checking your credit score usually involves a couple of steps:

  • Provide basic information including your name, date of birth and residential addresses you've lived for the last three years
  • Verify your identity using your driver licence or passport number

  Once your identity has been checked, you'll usually be provided with your credit score within minutes.

Where's the line drawn between good and bad credit?

Credit scores can range between 0 and 549 for a poor score and up to 800 and 1,200 for an excellent score. Lenders use this number and your credit report to assess your application when you apply for a credit card or loan.

What credit score do I need for a credit card?

Not all credit cards will have the same criteria when it comes to credit score. In general:

• Aim for a score that's above 'average' as the higher your score, the higher your chances of being approved so having score that's good to excellent is ideal.
• Credit scores range from 0 to 1,200 across the three main credit reporting agencies, Equifax, Experian and Illion.

Credit score ranges from credit reporting agencies

Here is a breakdown of credit score grades for each credit reporting agency. Note that if you order your credit score and report from finder.com.au, this information is delivered by Experian.

_{A good credit score usually sits between 800 and 1,200. The exact bracket may vary depending on the credit reporting body you get your credit score from. For example, if you get your free credit score from finder it will be delivered from Experian and it will be a number between 0 and 1,000. However, Equifax's credit score system rates credit scores between 0 and 1,200.}

What each range means for your application

• A high score opens the door to just about any credit card.

• Low credit scores can expect lower credit limits, high interest rates and even outright rejections if your score is considered too low.

• Just average? You might be in the clear. Generally speaking, credit card providers choose to lend to borrowers with a score ranked as average or higher.

There is no guarantee of approval

Saying all that, having an above average credit score is still no guarantee that you will be accepted. It's ultimately up to your financial institution as to whether they approve your application or not but having a decent credit score is certainly a good place to start.

A good example of this is when you're applying for a platinum-style credit card which can be considered more exclusive. These are often difficult to obtain even for those with above average credit scores as banks tend to look for a long period of good credit history.

Your credit score is not set in stone either, which means you can expect it to go up and down over time based on your financial behaviour. A big enough blip in your credit report can make an impact on your credit score and make you less attractive to credit card providers. A late payment, holding too much debt and even a previous credit card rejection can all bring your score down.

What are the other eligibility requirements for a credit card?

In most cases, you can apply for a credit card if you're 18 or older, have a good credit history and meet any specific eligibility criteria set out by your financial institution. Some of these can include:

• Valid Australian residency status. You need to either be an Australian citizen, permanent resident or hold a valid visa if you're a temporary resident.
• Minimum income. An income requirement can range from $15,000 to $80,000 and even higher. This is to ensure that you have enough income to pay off the card you're applying for.
• Not bankrupt. This will be likely reflected in your credit score but some financial institutions will specify that you can't have been declared bankrupt.

What are the options for a credit card with bad credit?

Credit score not looking so crash hot? The good news is, you do still have some options. While you might not have your pick of credit card or be able to choose your credit limit, there are still credit card options for applicants with bad credit.

Some options you can consider include:

• Low limit credit cards. A card with a low minimum credit limit reduces the risk to the lender meaning you have a greater chance of being approved.
• Debit cards. Debt-proof and as widely accepted as payment as credit cards, a debit card could be a suitable replacement.
• Prepaid credit cards. Similar to a debit card, prepaid cards need to have funds loaded on to them before using it.
• Short term loans. Also known as payday loans, short term loans are generally borrowed on terms between 16 days and 1 year. These loans do come at a high cost in terms of fees and interest so you really should put in considerable thought before applying.

You can also have a chat with your current financial institutions if you are having trouble getting approval. You already have a history with them and they should have a good sense of your financial position so may be more willing to lend compared with a lender with whom you have no history.

How can I improve my credit score?

If you have a credit score below the "good" threshold, here are some ways you can improve your score:

• Consolidate your debts. If you're struggling to pay off multiple debts, you can consolidate them into one account. For example, you could consolidate several credit card debts onto one card with 0% on balance transfers and pay it off with no interest for a promotional interest. You can also compare personal loans that are designed for debt consolidation. Not only are your debts easier to manage because they're under one account, you should save on interest costs by choosing a card or option with a low interest rate.
• Make payments on time. The last two years of your repayment history is now listed on your credit report, so it's important to make your repayments on time. If you are late with one or two repayments just make sure you keep up with all of your following repayments.
• Establish healthy accounts. If you don't have a credit card or loan, you can also demonstrate positive repayment behaviours by paying accounts such as your mobile plan, internet plan, electricity account on time.
• Lower your credit limits. The credit limits of your open credit accounts are listed on your report, but not how much debt you have. So if you have three credit cards with high limits but only a bit of debt, it still may have a negative effect on your score. Reduce your unused limit for an easy credit score win. However, keep in mind that lowering your credit score can will impact your credit utilisation ratio and could hurt your credit score if you have a high debt to credit limit ratio. You can weigh up the pros and cons of reducing your credit limits in this guide.
• Demonstrating job stability. A steady income (such as staying in the same job for a few years) demonstrates responsibility and your ability to repay to lenders.
• Rental and home ownership. Long-term rental or homeownership can also shows lenders that you are capable of making regular repayments and can manage other loans.
• Don't make too many credit card applications. Each credit application you make shows up on your credit report regardless of whether it is approved. Having numerous credit applications on your report in a short space of time will have a negative effect on your credit score. If your credit card application is rejected, you should avoid applying for another one until you've had time to improve your credit score and ensure you're eligible for the card.

Learn more ways to improve your credit score

How can I check my credit score?

You can order a copy of your credit report through a credit reporting bureau or for free through Finder. Follow the link below to sign up and get yours today.
Get your free credit score and credit report

Lenders that offer personal loans to bad credit borrowers

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Name	Product	Maximum loan amount	Term of Loan	Turnaround time	Arrears Fee	Costs	Fortnightly Repayment (for $1500 Loan)
Sunshine Short Term Loans		$2,000	9-14 weeks	30 minutes - conditions apply	$35	20% of loan amount + 4% of loan amount each month	$396	A small loan up to $2,000 that you repay over 9-14 weeks. Loans approved and funded in as little as 30 minutes.	Go to site More Info	Compare	loading Fetching your data...
Nimble Short Term Loan		$2,000	62 days to 9 months	1 hour - conditions apply	$15	20% of loan amount + 4% of loan amount each month	$372	A loan up to $2,000 with terms up to 62 days to 9 months. Centrelink cannot be your primary source of income.	Go to site More Info	Compare	loading Fetching your data...
Safe Financial Small Loan		$5,000	22 - 52 weeks	Same day - conditions apply	$35	Up to $2,000 - 20% establishment fee + 4% monthly. Above $2,000 - $400 + loan management fee of up to $399 + from 8.7% to 48% APR	$396	Borrow from $1,000 to $5,000 with same-day funding and no early repayment fees.	Go to site More Info	Compare	loading Fetching your data...
Moneyspot Small Loan		$2,000	62 to 90 days	1 hour - conditions apply	$35	20% of loan amount establishment fee + 4% of loan amount monthly.	$396	Borrow under $2,000 and benefit from a transparent fee structure and a simple application. Bad credit borrowers considered.	Go to site More Info	Compare	loading Fetching your data...
Ferratum Cash Loans		$1,900	3 to 12 months	Same day - conditions apply	$55	20% of borrowed amount + 4% of borrowed amount each month	$396	Borrow what you need with loans starting from $500 and approval in minutes.	Go to site More Info	Compare	loading Fetching your data...

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Name	Product	Maximum loan amount	Term of Loan	Turnaround time	Arrears Fee	Costs	Fortnightly Repayment (for $5000 Loan)
Nimble Medium Loan		$5,000	up to 22 months	1 hour - conditions apply*	$15	Application fee of $400 + 47.62% p.a.	$262.75	Apply for up to $5,000 and have up to 22 months to repay.	Go to site More Info	Compare	loading Fetching your data...
Swoosh Finance		$4,584	60 days -12 months	Next business day	$35	$416 + 47% p.a. of borrowed amount	$244	A secured loan up to $4,584 you can apply for in 10 minutes. Have up to 1 years to repay what you borrow.	Go to site More Info	Compare	loading Fetching your data...
Fair Go Finance Personal Loan		$10,000	3-36 months	Within 24 hours	$35	from 17.9% p.a. + establishment fee of between $360 - $771 + $9 monthly fee	$238.07	A larger loan up to $10,000 you can apply for even with bad credit. Fast turnaround within 1 business day. Note: You must earn more than $500 per week.	Go to site More Info	Compare	loading Fetching your data...

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