What to do with a good credit score

It's more than just a number: Find out how your good credit score can benefit you.

If you've checked your credit score and found it falls into one of the higher credit bands, it's important to understand how to use it to your advantage. This guide will take you through what a good credit score is, what you can do with your good credit score and how you can improve it.

What is a "good" credit score?

In Australia, you can either receive a Equifax Score from credit reporting bureau Equifax, or a credit score from Experian. Any Equifax Score over 622 is considered "good", while an Experian credit score over 625 is considered "good". Here is a breakdown of the credit bands for both credit reporting bodies:

Credit bandEquifaxExperian
Very good726-832700-799
Below average0-5090-549

I have a good credit score. What can I do with it?

A good credit score can lead to a range of benefits. Here are some options to consider:

  • Ask for a discount on your home loan. Your good credit score indicates a steady financial situation, so you may be able to negotiate a better rate with your home loan provider, or even get certain fees waived. Keep in mind this generally won't work for a credit card or personal loan.
  • Consider a peer-to-peer loan. This is a relatively new type of lending where your interest rate is based on your credit score. The better your credit score, the lower your rate, which can be as low as 4% p.a. for an unsecured personal loan.
  • Get rewarded. If you're in a stable financial situation and you're considering getting a credit card or upgrading your current one, why not consider one with rewards? If you repay your balance in full each statement period, you won't have to pay any interest.
  • Opt for a risk-based lender. Similar to P2P loans, some newer lenders will award different interest rates depending on your credit band. If you have a good credit score you'll receive a better rate for your loan.

I don't have a good credit score. How can I improve it?

  • Check your credit file for ways to improve. A low credit score indicates negative listings on your credit file. While you can't remove negative listings, you may be able to improve some of your other listings. For example, if you aren't using your full credit card limit, you might consider reducing it. This indicates responsible borrowing and may improve your credit score. Order a free copy of your credit file so you can identify listings that can be improved.
  • Repay your bills on time. Ensure that you make all your repayments on time. Even if there are high-risk listings that you cannot improve, your positive behaviour going forward will be looked upon favourably.
  • Redirect mail when you move. If you move, make sure creditors have your current address. This will reduce the risk of defaults or missed payments due to your bills being sent to the wrong place.
  • Don't make multiple applications for credit. Every time you apply for credit, it gets listed on your credit file. Multiple applications in a short space of time can have a negative effect on your credit score. Try to space out your credit enquiries and if you already have multiple enquiries listed on your file, wait until they have expired before you apply again.
  • Monitor your credit. Check your credit score for free every six months with and see if your score has changed. You can also order a copy of your credit file directly from Equifax for free every 12 months.


Picture: Shutterstock

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