What range of credit scores are considered 'good'?

The higher the better when it comes to credit scores and based on the scoring system you'll receive through Finder, above 700 is a very good score and above 800 is considered excellent.

Negative actions that can affect your credit score

• 1. Late loan repayments

  Any missed repayments normally have a significant impact on your credit score.

  Easy tip: Have any large loan repayments scheduled to come out of your account on the same day as your pay.

• 2. Forgetting to pay your bills

  If you pay a phone or electricity bill late repeatedly, this could turn into a default. Defaults may stay on your credit file and can affect your score negatively.

  Easy tip: Pay your bills as soon as you receive them, to ensure you don't forget. You could also set a calendar reminder so your phone sends you a notification when payday is near.

• 3. Applying for balance transfers too often

  A balance transfer is when you transfer debt from one account to another. Often this happens with credit cards in order to reduce the interest rate. Each time you apply for a balance transfer it will appear on your credit report, which informs how your credit score is calculated.

  Easy tip: Use Finder's guide for credit card balance transfers to find the best deal. When you're satisfied with the interest rate you're paying, work on paying down the debt for a while before making another transfer.

• 4. Payday loans

  Payday loans don't look good on your credit report and can badly affect your credit score. Credit reporting bodies like Illion, Experian and Equifax look at the type of providers you apply for credit from and payday lenders have a level of risk attached as they have big fees.

  Easy tip: Set yourself a budget so you don't find yourself short of money before your next pay check.

• 5. Afterpay and Buy Now Pay Later loans

  If you miss Afterpay and any Buy Now Pay Later loans, these companies can report any negative account activity.

  Easy tip: Avoid any layby sort of loans and save up instead.

• 6. Court judgements, including bankruptcy.

  Bankruptcies (when a court legally declares you're unable to pay your debt) stay on your credit report for two years after the bankruptcy ends, or five years from the date you're declared bankrupt.

• 7. Too many credit enquiries

  Each time you apply for credit, an enquiry is added to your credit report, and will stay there for five years. If you ask several banks and lenders for a loan in a short period of time, it could seem like you're in financial strife, and could put off these lender.

  Easy tip: Really consider when you need to reach out for a loan. Finder's MoneyFinder tool will help you research all of your options, comparing various lenders for car, home and personal loans.

• 8. Bad debt

  Bad debt includes debt that is detrimental to your wealth. This usually includes debt you've racked up when purchasing something that depreciates, like a car. You also take on bad debt with you use your credit card for maintaining your lifestyle, on things like huge restaurant bills and luxury items beyond your means.

  Easy tip: Before taking on any debt, consider what you really need. For example, next time you're on the market for a car, go for a model that costs a little less to ensure your debt doesn't hang around too long.

What is a credit score?

Your credit score is a numerical score that represents how creditworthy you are. or in other words, a number that demonstrates your reputation as a borrower. The higher the score, the more creditworthy you appear.

How is it different to a credit report?

A credit report contains the nitty-gritty detail of how a credit score is calculated. Along with your date of birth, driver's license number and contact details, a credit report includes details of any credit product you've held or applied for., your repayment history, defaults on bills and loans and any bankruptcies or debt agreements.

What can I do with a good credit score?

A good credit score puts you in a strong financial position in several ways including giving you more negotiating power when applying for a loan, an increased borrowing capacity and a better chance of being approved for a loan or credit card.

How can I improve a bad credit score?

• 1. Pay bills on time

  Bills that are due longer than 60 days will appear on your credit report as defaults and stay there for five years. If you foresee problems paying on time, talk to your provider early to negotiate a payment plan.

• 2. Lower the limits on your credit card

  If you never get close to hitting your card's limit, consider lowering it. You'll lessen your risk of racking up debt and it will be a positive action on your credit report that could impress lenders.

• 3. Make frequent payments on existing loans

  Opt for small and more frequent payments throughout the month to help reduce your debt quicker. Another option is to throw in a bit more with your monthly payments. This shows you can plan well and be responsible for your finances.

• 4. Keep credit cards that you're paying off

  Build on good credit and show lenders that you're trustworthy by being consistent and reliable with your payments.

• 5. Keep track of your credit record

  Check in on your credit score regularly and if you find any incorrect listings, make sure to take the necessary steps to have them removed.

How can I fix errors in my credit report?

If you find any errors on your credit report or see something that shouldn't be there, you should contact Experian immediately to request to have it removed. Learn more.