Credit Management Credit rating Credit Reports Credit Risk
5 mins read

Does Australia have credit scores?

Every Australian consumer has a credit file with the three main consumer reporting bureaus: Experian, illion and Equifax. CreditorWatch differs to these bureaus in that it is a specialist B2B credit reporting bureau and doesn’t collect data on consumers. 

Consumer bureaus generate credit scores through consolidating data from credit products, such as cards, loans, phone plans and utilities. Each Australian business also has a credit file and score system, with the most comprehensive credit reporting suite for businesses offered by CreditorWatch.   

What is a credit score? 

A credit score is a number representing your creditworthiness to a lender. Your creditworthiness speaks to your ability to service debt products such as loans and lines of credit. The better your credit rating, the safer you’re judged to be as a borrower. Banks, lenders and businesses extending credit will refer to your score when assessing your application.  

There is a difference between credit scores for businesses and for individuals. As an individual, you will have multiple credit scores from the various credit reporting bureaus that reflect your own risk as a consumer debtor. Your business will also have its own independent set of credit scores relating to its own reliability as an entity.  

Every credit score has the same purpose (to determine the creditworthiness of the entity in question) however, there is no collaboration between the different reporting bodies. They may capture data from the same events, but their algorithms, software and methods all vary. This can lead to quite significant differences in scores from one reporting body to the next.    

Credit scores for individuals 

There are three main reporting bureaus for individual consumers in Australia: illion (formerly Dun and Bradstreet), Equifax, and Experian. You will have a credit file with each one that, with enough data, will generate a credit score. Each credit file with each credit reporting bureau is independent, and your score with one does not reflect your score with them all. They do not gather the same data, they register information changes at separate time points, and they even score according to different scales. As such, there is no universally average credit score.  

Your credit score in Australia can be affected by a multitude of variables such as: 

  • Any credit products you’ve already applied for. 
  • Hard credit enquiries on your credit file over time. 
  • Credit limits for each product being applied for. 
  • Repayment history, including late payments (exceeding 14 days). 
  • Adverse events, such as payment defaults, ASIC notices etc. 

Individuals are entitled to a free copy of their credit file once every three months, which does not get reflected in their credit history. To do so, contact one of the reporting bureaus and register your intention.  

What is a good credit score in Australia for individuals? The bureau credit score ranges, or tiers, for individual borrowers are as follows: 

Very Good700-799726-832700-799
Below Average0-5490-5090-299

Credit scores for businesses

For credit file enquiries for businesses, there is a wider array of credit reporting agencies. Leading the charge in terms of sophistication and predictive ability – the credit reporting suite available from CreditorWatch, inclusive of RiskScore, provides the highest quality debtor and trading partner analysis available in Australia. 

The credit reporting platform leverages three extensive, exclusive datasets including more than 11 million monthly trade lines from over 55,000+ CreditorWatch customers. The analysis that is generated, through advanced machine learning, empowers our clients with detailed insight into which partner businesses you can extend terms to, and which should be avoided. 

Once enquired by searching the ABN or ACN, the credit score between 0-850 that is generated by our RiskScore technology clearly indicates those that may present a credit risk. To further inform your decisions, we then combine the score with industry-specific data and trendlines to allocate a risk category to that business. Armed with this information from the company credit check, our clients have been able to protect their cash flow and avoid unscrupulous trading partners.  


Credit RatingRisk CategoryRecommendation
A1, A2, A3Very LowEntity has a very strong aptitude to meet credit commitments. Extend terms within consideration.
B1, B2LowEntity has a strong aptitude to meet credit commitments. Unfavourable economic conditions may lead to a weakened capability to meet financial commitments. Extend terms within consideration.
B3, C1NeutralEntity currently has the aptitude to meet credit commitments. Unfavourable business, financial, or economic conditions may impair ability to meet financial commitments. Extend terms and monitor ongoing payment behaviour.
C2AcceptableEntity has an adequate aptitude to meet credit commitments. Unfavourable business, financial, or economic conditions will likely impair the capacity or willingness to meet financial commitments. Extend terms, and closely monitor ongoing payment behaviour.
C3BorderlineEntity is vulnerable and the aptitude to meet credit commitments is dependent upon favourable business, financial, and economic conditions. Trade with caution, closely monitor and consider your payment terms.
D1, D2, D3HighEntity is currently highly vulnerable. COD trading is highly recommended.
EImpairedEntity is currently highly vulnerable to non-payment and default. Trading eligibility must be considered.
FDefaultEntity has become insolvent or does not have the ability to trade.

Do credit scores matter in Australia? 

Any Australian bank, lender, or business extending credit will always enquire about your credit score with one or more credit reporting bodies when assessing your application. For example, it is unlikely that you will find any ‘no credit check credit cards’ or products, as this due diligence is essential to determine your suitability for products including, but not limited to:  

  • Credit cards. 
  • Utility bills.
  • Company lines of credit line.
  • Personal loans.
  • Home loans.
  • Business loans.
  • Mobile phone plans. 

For individuals, the lender can accomplish this by conducting either a hard enquiry or a soft enquiry on your credit file with their bureau of choice, to check credit history. The bank or lender will then combine the credit score check information with their own individual mix of in-house analysis and due diligence processes.  

You may wonder: what credit score do banks use? Typically, Australian banks may access more than one of your credit files with the credit reporting agencies, to form a more comprehensive view of your credit risk. Banks also have their own risk models that incorporate data from credit reporting bureaus. There is no set minimum credit score for a credit card product or similar, due to variations between financial institutions.   

  • A ‘hard’ enquiry will remain on your credit file for up to five years for future reference. Suppose too many of these enquiries are conducted over a short space of time for the same applicant. In that case, it may indicate that you are ‘credit hungry’, and displaying an over-abundance of enthusiasm. This may lead certain lenders to be more likely to reject your application, as they may believe you to be reckless in your approach to securing credit. 
  • By comparison, a ‘soft’ enquiry will not be reflected in the history of your credit file. Organisations such as Afterpay prefer to conduct such enquiries, as they can avoid negatively affecting the credit score of their applicants. It may be worth considering what kind of credit score checking a business conducts prior to applying, in order to protect your file from too many hard enquiries.  

So, what is the minimum credit score for a home loan or what is the minimum credit score for a car loan? Unfortunately, it’s not that simple. There is no minimum score to gain approval for credit products as it varies from lender to lender, and some may be more prepared to take on risky borrowers at a potentially higher rate of interest.  

As a general rule, it is better to simply ensure that your credit score is as high as possible by paying all bills and debts on time, and exercising some restraint when applying for new loans or credit cards. This will offer the highest possible chance of a successful application across a range of loan products.  

Protect your business from bad debt with CreditorWatch 

The credit reporting suite from CreditorWatch, complete with RiskScore, empowers your team with the vital tools to determine your customers’ creditworthiness and likelihood of payment. Moreover, the 24/7 monitoring and alerts we offer will ensure that no change to any essential information ever slips through the cracks. You need to know who is safe to trade with, and we’re on hand to provide that peace of mind. 

Speak to our expert team today, identify risks early and protect your business.  

credit credit management credit policy credit reports credit risk credit score credit terms finance
Sarah Ward
Business Development Specialist | Credit management and Collections
Sarah is a highly experienced business risk, credit management, collections and business development specialist with over 10 years of experience. She is an expert in identifying and mitigating risks and has helped numerous businesses gain a deep understanding of the latest trends in credit management. Sarah’s recent work includes writing about high-risk businesses and how to identify them and providing insights on using a risk assessment tool like CreditorWatch’s RiskScore to make informed decisions. She also emphasises the importance of performing due diligence on new clients to assess their credit risk and mitigate cash flow risk. Additionally, Sarah has also written about cash control and how to improve debtor management. Sarah’s recent work includes writing about high-risk businesses and how to identify them and providing insights on using a risk assessment tool like CreditorWatch’s RiskScore to make informed decisions. She also emphasises the importance of performing due diligence on new clients to assess their credit risk and mitigate cash flow risk. Additionally, Sarah has written about cash control and how to improve debtor management.
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