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What to do with a good credit score

It's more than just a number: Here's what is considered a good credit score and how it can benefit you.

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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 check your credit score with credit bureaus such as Experian or Equifax. Each bureau will use a different scoring system so a "good" credit score will be different with each. Any Experian credit score over 625 is "good" and any Equifax credit score over 622 is "good".

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The following is a breakdown of credit scores from both providers:

Credit bandExperianEquifax
Excellent800-1000833-1200
Very good700-799726-832
Good625-699622-725
Fair / Average550-624510-621
Weak / Below average0-5490-509

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

A good credit score can provide 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 position, 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 your financial situation is stable 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 lenders will award different interest rates depending on your determined risk. The lower your risk, the better your rate will be.

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

  • Check your credit report 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. Check your credit report for free with finder today 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.
  • 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 span 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. You should check your credit score regularly, which you can do for free with finder, and see if it changes. You should also keep an eye on your credit report to see new listings, repayments information or when listings are removed.
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