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What Doesn’t Affect Your Credit Score?

Laura Parcell

Laura Parcell

October 13, 20215 minute read
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If you’re planning to apply for credit or a loan, staying on top of your credit score is important. However, credit scores can be a lot to get your head around. It can also be difficult to determine exactly what affects your credit score — and what doesn’t.

On this page:

    In this guide below, we give an overview of what a credit score is, why it’s important, where you can find yours, and what factors can affect it.

    What is a credit score?

    A credit score is a number between 0 – 1,000 or 1,200 that represents the personal and financial information in your credit report and represents your creditworthiness. Your rating can affect how lenders view you as a borrower.

    The table below of Equifax’s rating scale can give you an idea of what your credit score is likely to mean:

    Rating Score
    Excellent 833 – 1200
    Very Good 726 – 832
    Good 622 – 725
    Average 510 – 621
    Below average 0 – 509

    Why is a credit score important?

    If you want to obtain financing, your credit score is often an important factor in getting approved. Lenders use this score to determine the extent to which you’ll be able to repay your loan in a timely manner. So, knowing your credit score can help you negotiate better deals, or understand why your application was rejected.

    Do you have a low credit score? You could be considered a subprime borrower and may be offered a higher interest rate and shorter repayment term. This is due to the higher risk the lender takes on when offering credit to an individual with a low credit score. In the eyes of a lender – the lower the credit score, the higher the risk of the client defaulting on their loan.

    On the other hand, if you have a good credit score, this may result in you receiving a lower interest rate. In the long run, this will offer you a financial advantage as you’ll be paying less money in interest over the span of the loan.

    Lenders can frequently review your credit score if you’ve borrowed money, so it’s important to keep on top of it. In the instance that your credit score does change, the interest rate or credit limit on your credit card could be changed.


    Did you know?

    According to Finty, Queensland (QLD) residents have the lowest credit scores, coming in at an average score of 641. On the other hand, with an average score of 680, the Australian Capital Territory (ACT) takes the crown for the highest average score.

    Where can I find my credit score?

    Are you curious to find out your credit score? It’s important to know where you stand and if your credit score is lower than you thought, this can give you the motivation to improve it. Also, if there’s an error or inaccuracy in your credit report, you can get this removed at no cost.

    In Australia, your credit score is calculated by these three credit reporting agencies:

    1. illion
    2. Equifax
    3. Experian

    You can access a free annual credit report from any of these companies once every three months, so make sure you take advantage of this.

    What does affect your credit score?

    Before we delve into what doesn’t affect your credit score, let’s look at some of the factors that can affect your credit score. The below table outlines some of the main reasons your credit score can increase or decrease:

    What can increase your score? What can decrease your score?
    If you have a trend of making repayments on time, this can be a great way to boost your score. If you have a consistent pattern of late repayments on bills or loans, your credit score can decrease.
    Taking out a home, student, or business loan is considered good debt. This can show how you’ve handled debt positively in the past. Some lenders consider certain loans as bad debt. A payday loan and some credit cards can bring down your score.
    By checking your credit report, you can remove any errors or inaccuracies. This may improve your score overall. If you have an overdue debt, you may be reported to a credit reporting agency as having a default which can stay on your file for five years.
    Do you have multiple credit cards? Keeping credit cards and maintaining repayments with all current credit providers may help you demonstrate positive repayment habits, increasing your credit score. If you’ve filed for bankruptcy, this can suggest that you can’t handle your money responsibly.
    If you have multiple credit cards, you could consider lowering the credit limits to reduce the amount of debt you can accrue. ‘Hard enquiries’ occur when a lender looks at your file when you apply for credit or a loan. If there are too many credit inquiries in a short time frame, this can suggest that you’re financially struggling.

    What doesn’t affect your credit score?

    Now we’ve established what can affect your credit score, let’s discuss what doesn’t affect your credit score:

    Checking your credit score

    We’ve explained how hard enquiries can decrease your credit score. However, there are many credit score check platforms that can let you conduct a ‘soft enquiry’ that doesn’t affect your credit score. This can be a great way for you to find out where your credit score stands without decreasing it.

    Rent, phone, and utility bills

    The repayment history of your bills is stored on your credit report for up to two years. However, only your repayment history from licensed credit providers can be recorded. So, the repayment history from telecommunication and utility companies are excluded from your credit report.


    Your income isn’t included in your credit report however, some lenders could still request this information from you when applying for a loan as a part of their own credit assessment criteria.

    Savings, investments, and assets

    A credit report doesn’t include the details on what you own. Bank accounts, investments, and assets aren’t factored into your credit score.

    Credit utilisation ratio

    The ratio of your credit card debt to your credit card limit doesn’t affect your credit score. While your credit card limit is listed, your balance won’t be. So if you have credit card debt, this won’t negatively affect your credit score, as long as you continue to make your repayments on time.

    Copyright © www.jacarandafinance.com.au Jacaranda Finance Pty Ltd ® ABN 53 162 078 195 Australian Credit Licence 456 404, Pawnbroking License Number 4221738. The information on this web-page is general information and does not take into account your objectives, financial situation or needs. Information provided on this website is general in nature and does not constitute financial advice.

    Laura Parcell
    Laura Parcell

    Written by Laura Parcell

    Laura Parcell is a Public Relations Specialist and Content Writer at Jacaranda Finance. She has a Bachelor of Business (Public Relations)/ Media & Communications with Distinction from the Queensland University of Technology.

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