At a time when Australians struggle with increased living costs brought on by interest rate hikes, consumers monitoring their credit scores hit record-high levels, with a 42% increase in people checking their credit report and score every month since April 2022, according to the latest data from Experian.
In a media release, the information services and Australian credit bureau defined credit score as a representation of how a credit provider may view the information on a consumer’s credit report, providing an indication of their credit health.
Credit scores, which range from 1 to 1,000 (sometimes 1,200 depending on the credit bureau), help lenders assess a potential borrower’s application for credit, including for a home loan. The higher the credit score, the healthier the consumer’s credit report is.
Tristan Taylor (pictured above), Experian’s general manager credit services A/NZ, said knowing one’s credit score and how it is impacted by financial behaviours is important not just for successfully tapping credit opportunities in Australia but also for overall financial wellbeing.
“Spending decisions, no matter how small they are, add up and have an impact on everyday finances,” Taylor said. “However, while awareness of credit scores and their impact on taking out credit has increased, it’s still an under-utilised tool to gauge the status of one’s financial health.”
Rob Hayhurst, head of credit risk at Great Southern Bank, said all banks consider a customer’s credit score for those applying any line of credit, including home loans, as it is a good indication whether a loan applicant regularly meets their financial commitments, such as bills, credit cards, BNPL accounts, and existing loans.
“Australians that check their credit score may have a better sense of their financial position and, if needed, they can then take steps to improve their score and the likelihood of being approved for a loan,” Hayhurst said. “Great Southern Bank is focused on giving more Australians the opportunity to own a home – and this journey can often start with a good credit history that works in a loan applicant’s favour.
“A discussion with a home loan expert to learn more about credit scores and getting loan-ready could be a good stepping stone for those looking to take out a mortgage or a personal loan in the future.”
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