Life can throw curveballs at you, and your finances might not always be smooth sailing. For example, you cannot assess your finances properly and fail to get a business loan for bad credit. Moreover, your credit score can affect your everyday livelihood.
According to the Australian Government, the gross debt of the nation was AU$ 684.298. So, you are not in this alone.
But, to get out of debt, you need to increase your credit score.
What is the Australian Credit Score?
The credit score refers to the credit rating you get when paying off your debts timely. Usually, it ranges from zero to 1,000 or sometimes 1,200, depending on the bureau. In its essence, this numerical expression gets determined based on the analysis of your credit files.
Australians use it to represent your worthiness for attaining more loans. Moreover, it is based on the report that is sourced from credit bureaus before calculating.
As a result, the higher your credit score, the greater your chances of securing a loan. Even yet, if a company sees you as an appropriate candidate, it may provide you a business loan with bad credit.
The Range of Credit Score in Australia
| Range of Credit Score | Credit Simple (Illion Score) | Equifax | Experian |
| Excellent | 800 to 1000 | 833 to 1200 | 800 to 1000 |
| Very Good | 700 to 799 | 726 to 832 | 700 to 799 |
| Average | 500 to 699 | 622 to 725 | 625 to 699 |
| Fair | 300 to 499 | 510 to 621 | 550 to 624 |
| Low | 0 to 299 | 0 to 509 | 0 to 549 |
Note: Illion was taken as an example to represent the relationship between your finances and your credit score.
Why Is Credit Score a Big Deal?
Having a bad credit score will indicate that your worthiness as a borrower is minimal. Moreover, it will also showcase your imbalanced financial stability.
With a bad credit score, you might lose out on loan opportunities. The lenders will not consider your application after seeing the number and get you stamped as one of those high-risk individuals.
There will be no trust between you and the lender. So, it would be best if you aimed for your credit score to be between very good and excellent.
Even then, there are companies offering any business loan for bad credit to individuals who deserve it. So you can look into that or consider getting your credit score higher.
How Can You Improve Australian Credit Score?
Improving credit scores in Australia can be challenging but attainable. If your credit is lower than average, then you should follow these steps to improve it:
- You can lower the limit of your credit card
- Limiting credit applications can also help
- You need to pay your rent/mortgage before the deadline
- Paying your utility bills beforehand can have a positive impact on your score
- It would be best to deliver your credit card debt on-time
If you follow a stringent regime and have a steady income, then your credit score will inadvertently improve. And your loans will get approved when you apply.
If you want to take out house or business loans, you’ll need a strong credit score. But, even then, there are options to get a business loan for bad credit from different companies. Or, you can adhere to credit score improving methods like paying bills on time.
Either way, having a credit score of 700 is a good start towards living a financially stable life.
