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Equifax credit score: Who they are and how to read your score
Got a credit score through Equifax? Let's break it down for you.
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Want to find out your credit score? Equifax might be able to help. They're a leading credit information provider in Australia and has helped of 20 million people get their credit profile. We'll run through what services they offer, how to read their credit reports, and the pros and cons of Equifax.
What is an Equifax Score?
There are a number of different credit scoring systems used by credit bureaus. These scores factor in the information listed on your credit file and reflect your ability to repay credit. An Equifax score is calculated by Equifax, Australia’s largest credit bureau. Your score helps lenders assess your credit application when you apply for a loan or line of credit. Similar to a tool that ranks your risk, all credit information is used to predict the outcome of your loan within the next 12 months.
In addition to your Equifax Score, lenders will apply their own lending criteria. This is why you shouldn’t completely rely on your score as an indicator of whether you should apply for the credit or not.
What's a good Equifax score?
In Australia, your Equifax Score will be a number between 0 and 1200. A "good" credit score is between 622 and 725, a "very good" score is between 726 and 832 and an "excellent" score falls between 833 & 1200.
We've broken down the Equifax score bands and what they mean in more detail below:
- Below average to average (0-509). It's more likely an adverse event will be recorded on your file in the next 12 months. You are in the bottom 20% of Equifax's credit-active population.
- Average (510-621). This score suggests that it's likely that you will incur an adverse event in the next 12 months. Your score places you in the bottom 21-40% of the credit-active population.
- Good (622-725). Adverse events are less likely to be recorded for the next 12 months. You fall in the mid-range (41-60%) of Equifax's credit-active population.
- Very good (726-832). Unfavourable events are unlikely to be recorded in your credit file within the next 12 months. Your score places you in the second-highest percentile range of the credit-active population (61-80%)
- Excellent (833-1200). Adverse events are highly unlikely to happen within the next 12 months when compared to the average Australian. The odds of no adverse events occurring on your credit file in the next 12 months are five times better than the population average and you are in the top percentile range (81-100%).
Understanding your Equifax credit score
Your Equifax Score is displayed as a number and indicates the likelihood of an adverse event being recorded on your credit file in the next 12 months. An adverse event can be a range of "bad credit" listings such as a default, a bankruptcy or a court judgement.
The higher your Equifax Score, the less likely it is an adverse event will be recorded on your file and the less of a risk you will appear to lenders. The lower your credit score the riskier you will appear as a borrower.
How is your Equifax Score calculated?
Your credit score is calculated using the information on your credit report and there are a number of factors that take into account your risk as a borrower. These include:
- Type of credit provider. There may be different levels of risk when approaching different lenders. A non-traditional lender may have a different level of risk than a bank or credit union.
- The size of credit requested. Both the type and size of the loan or credit limit you’re requesting can affect your Equifax Score. Mortgages have a different level of risk compared to credit cards.
- The number of credit enquiries. Every time you apply for a credit product, the credit provider obtains a copy of your file and the application is noted. If you've shopped around for credit and applied at a number of places in one space of time, it flags you as a higher risk. The pattern of credit enquiries over time also affects the level of risk.
- Directorship information. If you’re a director or proprietor, it may impact your Equifax Score so it’s important to check both the individual and commercial sections of your credit file.
- Age of credit file. The date your credit file was created. A new file may indicate a different level of risk compared to an older file.
- Personal details. Your score will consider your age, length of employment and how long you’ve lived at your current address.
- Default information. Any personal or business credit such as overdue debts, serious credit infringements or clearouts could negatively affect your Equifax score.
- Court writs. Default judgements or court writs may convey you as an increased risk and negatively impact your score.
Who is Equifax?
Equifax previously Veda was founded in 1967 as a credit reference association. It would accumulate data on commercial entities and individuals and analyse it so as to develop a comprehensive credit report. This information then gave lenders an insight into their customers' creditworthiness and risk index. With over 40 years of experience and an international footprint, Equifax has established itself as a leading data and analytics business.
Credit reports are constantly changing, so lenders need a service provider that can accumulate, interpret and transform new data to provide a better picture of a certain entity's ability to repay credit. This is why Equifax is dedicated to providing comprehensive credit reports for individuals and organisations.
What credit reporting services do Equifax offer?
Equifax offers a range of personal solutions to help you protect and manage your credit information. Here are the core products and services offered by Equifax:
- Credit reports. Equifax understands that your credit report is a major asset to you, which is why it is dedicated to ensuring that your credit history is accurate at all times. Equifax allows you to order a free credit report within ten days, or you can order a credit report within one day for a fee.
- Credit alerts. To help business entities and individuals better manage their credit reports, Equifax offers an alert service that dispatches email alerts whenever specific changes are made to your credit file. This allows you to remain informed and stay on top of the information in your credit file.
- Equifax Score. Equifax gives you the confidence to apply for credit by helping you improve your credit score and better your credit reputation with lenders. Your Equifax Score is a number between zero and 1200, calculated using the information on your credit file. It gives lenders an accurate assessment of your creditworthiness at any given time. Accessing your Equifax Score can help you understand what is affecting your credit rating so that you can improve your credit score.
- Identity Watch. Identity theft is a serious crime in Australia that can expose you to major losses, time wastage and bad credit scores. Equifax offers an Identity Watch service that monitors information on your credit cards and sends you alerts whenever your information is found to be compromised.
- Score Tracker. Tracking your Equifax Score over a period of time can help you figure out what affects your credit rating and help you determine the best time to put in a credit application. This tool from Equifax charts your score and helps you look more attractive to lenders.
How to read a credit report from Equifax
Credit reports from Equifax contain useful information on an individual's credit history and credit score. The file will contain the following fields of information:
- Consumer credit. This field contains information about consumer credit, including loan enquiries made in the past five years for personal purposes or renovations and refinancing, and also list guarantor information. This section of your Equifax credit file will also list any credit infringements and overdue debts.
- Credit account information. This section contains details of all open accounts, including your current loans and credit card accounts, their opening and closing dates and your credit limit or requests to increase your limit. It also shows accounts you've held in the past but are now closed.
- Monthly repayment history. Your Equifax credit file contains information of monthly repayments on loans and utility bills, including information about whether you missed a payment or made the minimum repayments on your mortgages, credit cards and other debts.
- Commercial credit section. This section contains enquiries about your commercial credit management and focuses on information on overdue commercial accounts, credit providers currently giving you credit for your business, and enquiries on business partners, directorship and property investment.
- Public record information. This section will contain court judgments, debt agreements, bankruptcy, insolvency notes and court writs.
What other services does it provide?
- Fraud prevention. Equifax can help you protect your identity by closely watching your credit report and sending you alerts whenever there is an online breach of your credit card or bank account.
- Credit risk management. By providing you vital information on business and individual credit histories, Equifax can help you minimise credit risk and ensure credit retention and profitability in your organisation improves through responsible lending.
- Secure Sentinel. The Secure Sentinel service secures your important documents and items, such as credit cards and passports, should you lose them. Equifax can cancel lost financial cards, block your mobile phone, and offer reliable loss and theft assistance whenever you need it.
- Tenancy Check. This service helps protect property owners from defaulted rent payments and damage to rental property by providing the credit information they need to vet new tenants.
- Property Value. Equifax offers independent property valuation information that helps you stay ahead of the pack in terms of market trends and property sales. With Equifax, you will access the latest house prices and trends in the real estate market in Australia so that you can make sound investment decisions.
- Insurance Passport. Get access to your insurance claims history and other information to help you receive the best price from insurance companies. Equifax will help you make the right disclosures while applying for insurance to ensure that you achieve this.
- Car history.Get access to the history of used cars on sale and save yourself the hassle of doing the research yourself. This allows you to buy safer used cars and get better deals.
What are some of the features and benefits Equifax offers with its products?
Equifax helps you access and manage your credit score to improve how you look to lenders. The comprehensive Equifax database containing credit information on companies, businesses and individuals can help you minimise the risk of accruing bad credit by giving you updated information about the credit histories of your customers.
Equifax also provides analytics services that help you understand and apply financial and credit data to empower your business. The various Equifax packages on offer allow you to protect your identity and credit information, track your credit score to improve it and time your credit applications, and find solutions to personal and business financial and data analysis problems.
If you want enquiries made into an entity in your credit report, Equifax can investigate and correct incorrect information to ensure your credit file remains accurate. This helps to ensure that your credit score improves and that you can be confident to apply for credit.
What are the benefits and drawbacks of Equifax?
- Wide range of products. Equifax offers a range of personal solutions that enable you to secure your documents against loss, access information on your credit score and protect yourself from identity theft. Equifax can also help you understand and improve your credit rating and offer you many more services to help you find solutions to financial and credit management problems.
- Convenience. Equifax helps you conveniently find services and relevant information, minimising the hassle of shopping around for information on tenants, property value, used car histories etc. You can also access credit information on your customers from the Equifax website.
- Risk management. You can manage personal and business risk through Equifax, as it helps you secure your financial information and avoid giving credit to individuals with bad credit histories. This reduces chances of fraud or defaults.
- Wait for updates. New information about your credit accounts may not be updated to your Equifax credit file immediately.
- Subscriptions are required to view your Equifax Score. If you'd like to receive your Equifax Score along with your credit file you'll need to sign up to Equifax's Starter Pack (or one of its other higher level packages). This comes at a cost of $79.95.
Frequently asked questions about your Equifax credit score
How can I improve my Equifax Score?
There are a number of ways to improve your credit score and it depends on what your current credit position is. However, limited your credit applications and making sure your repayments are on time will help improve your credit score. If you are able to, you can also consider cancelling or reducing the limit on your credit cards. Find out more ways to improve your credit score here.
How does my Equifax Score impact my credit application?
Your Equifax Score ranks the level of risk you are compared to the rest of Australia. It could be used to help credit providers assess your ability to pay the loan back and whether or not to approve your application.
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