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A high credit score will make it easier to qualify for mortgages and car loans, start a business, and, in some cases, secure a job. A bad score can lead to creditors being reluctant to lend to you, or charging you higher rates.

Striving for a good credit score is one of the most important financial goals to have. But what exactly is a “good” score – and is there a perfect one?

What is a Credit Score?

Your credit score sums up the information on your credit report into one number, designed to represent your credit risk, or the likelihood that you will pay your bills on time. The higher the score, the more creditworthy you’ll likely appear to reputable financial institutions, like banks. Higher credit scores generally result in more favourable credit terms.

Credit scores are based on the information in your credit report at a point in time and can change throughout your life. They rely on a huge number of variables with different weightings in different circumstances to calculate a score that is a proven predictor of your credit risk and ability to repay a debt.

There are a number of different credit scores and scoring models. If you find out your credit score through a credit reporting agency like Equifax, you will receive a number between 0 to 1,200, while Experian and Illion provide a number between 0 to 1,000.  The credit reporting agencies collect information from publicly available sources (such as court records and documents), as well as any information provided to them by the lenders they work with.

These three credit reporting agencies use their own proprietary algorithm to determine your credit score. Different credit events or even lack of recent credit activity are weighted differently by each agency, there can be discrepancies between your Equifax, Experian and Illion credit score, so it pays to check all three for any concerns.

Your credit score can be considered:

  • Poor
  • Fair
  • Good
  • Very Good
  • Excellent

Perfect Credit Score?

You don’t need a perfect credit score to receive the best terms from lenders, and you don’t need a perfect score to claim that you are financially free. In Australia, the three main credit reporting agencies Equifax, Experian and Illion, have the following credit score ranges.

How to Get the Highest Credit Score Possible

Credit scores are calculated using information in your credit report, including:

  • Your payment history such as the ability to make on-time payments
  • The amount of debt you have
  • The length of your credit history
  • Your credit limits and
  • Hard enquiries on your credit report.

While there’s not much you can do about the length of your credit history, if you’re looking to achieve the highest credit score possible, you should first consider all of these factors that make up your score. Then, follow these proactive steps to push you to get to the top of the range, utilising these tips will ensure that your credit score is constantly improving.

Manage your debts

Unfortunately, unless you win the lottery, there is usually no quick fix to get yourself out of debt. But the important thing is to take steps to change your financial future. With the right advice, it is possible to pick the best debt solution for you and put a sensible plan in place to get your finances back under control again. There are a number of informal and formal debt solution options available that we consider when developing a personalised tailored debt
solution package for you to consider.


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. Don’t worry if you have been late with one or two repayments just make sure you keep up with all of your following repayments. To avoid missing deadlines, set monthly reminders or sign up for automated payments. If you find that another payment date would work better for your cash flow, talk with your creditor about adjusting your payment schedule.

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 two credit cards with high limits but only a bit of debt, it can still be having a negative effect on your score. Consider reducing your unused limit for an easy credit score win. However, keep in mind that lowering your credit limit may impact your credit utilisation ratio, which could hurt your credit score if you have a high debt to
credit limit ratio. Credit utilisation is the ratio of how much credit you have available and how much you have spent. As a general rule, it’s best to have a credit utilisation of 30% or lower, ideally less than 10%.

Establish a positive payment history.

If you don’t have a credit card or loan, you can also demonstrate positive repayment behaviours by paying accounts such as your internet plan, mobile plan or electricity account on time. Long-term rental or homeownership can show lenders that you are capable of making regular repayments and can manage other loans. Staying in the same job for a few years also demonstrates responsibility and your ability to repay to lenders.

Don’t make too many loan or credit applications.

When you apply for a loan or a credit card, a hard enquiry is made 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 application is rejected, you should avoid applying for another one until you’ve had time to improve your credit score and maximise your eligibility.

Monitor your credit history

The worst thing that could keep you from reaching a perfect credit score is identity theft or credit report errors. In the blink of an eye, all of your hard work and strategic credit use could be flushed away by the careless actions of a thief or a simple administration error.



You can get free copies of your credit reports annually and you should closely read and understand their details to enable you to identify any errors or problems that need addressing in order to improve your credit. As well, there are many ways to check your credit score online. You should check your credit score first if you’re considering a big purchase like a home or car, so you can make sure you’re in a good position credit-wise before making a hard enquiry.

Get expert advice

While these guidelines are strong building blocks for improving your credit score, you may benefit from one-on-one credit and debt solution advice. If you’re in need of professional guidance on improving your credit score, call us today to speak with a credit coach. Our experts can help you take the steps you need to get your score as close to perfect as possible.

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