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Smart Money

Your Credit Score And How To Build It

Last updated

Pauline Hatch      

When times get tough financially, we tend to pull back, tightening our purse strings as we try not to spend unnecessarily. But, there are still the necessaries that need to be paid for. We still need to pay the mortgage and cover the bills. We still need to buy food and essentials such as petrol. Life doesn’t stop simply because there is less money coming in, or because our financial future looks less certain.

Over the past few months, both the banks and the government have been working to reduce the pressure felt by Aussies doing it tough financially. The government has released packages such as JobKeeper, providing extra income where it’s needed. It has also allowed those who are eligible to release some of their super. Meanwhile, banks have let struggling home owners pause their home loan repayments as they focus their finances elsewhere.

But those measures are only temporary. JobKeeper payments are due to end in September, as are most repayment ‘holidays’ offered on home loans. Which is why many are now worried about what will happen then. With less money coming in and more money going out, some Australian households will struggle to cover even the necessary expenses, which could seriously impact their credit score if they get behind in their repayments.

Credit Scores and COVID-19

While it may be hard to believe, the average credit score of consumers has actually improved during the COVID-19 crisis, according to credit reporting agency Experian. How could that be? One reason could be that both users and lenders have pulled back on credit. Lenders, for their part, have tightened their lending criteria, making it harder for borrowers to get approved. Meanwhile, many potential borrowers have chosen not to take out credit given their uncertainty around being able to pay it back.

For those who already had debt they needed to pay down, many have taken great pains to do so. According to credit reporting agency illion, its records show 14% of the money taken out of superannuation under the government’s early-release financial hardship scheme was being used to repay debt. Both the act of paying down debt and not making any new credit enquiries can have a positive impact in terms of credit reporting, helping those users build their credit scores despite uncertain financial conditions.

But with government subsidies, superannuation releases and repayment holidays coming to an end, all that may be turned on its head. For those who have been made redundant, for those who have been stood down, for those who are now earning less than they did before, meeting financial obligations could soon become that much harder. And if not being able to pay the bills wasn’t stressful enough, there’s the long-term effects missed or late repayments could have on their credit score to worry about as well.

Why Credit Scores Matter

So, why should anyone care about their credit score? Isn’t there enough to worry about without having to stress about some meaningless, made-up number? While your credit score may seem meaningless to you, it’s actually far from it. If you want to apply for a home loan, a car loan, a personal loan; if you want a phone contract or credit card; if you want to rent somewhere or arrange a hire purchase agreement, your credit score – and its accompanying credit report – is everything.

Summing up your creditworthiness in one neat little number, your credit score tells potential credit providers how likely you are to pay back what you borrow. If your credit score is low, this suggests you have not dealt with credit well in the past, perhaps being late with your repayments or maybe even defaulting on them. This would indicate to a potential provider that you may not be the best person to lend money to, which could result in your application being declined.

On the other hand, if you have a higher credit score, this shows you have acted responsibly with credit up until now, and would likely continue to do so. With a higher credit score, you would be more likely to be approved when you apply for credit – as long as you meet the provider’s other lending criteria, such as having a steady job, bringing in a certain income, and not being over-indebted elsewhere.

Below Average Average Good Very Good Excellent
0-505 506-665 666-755 756-840 841-1,200
Below Average Fair Good Very Good Excellent
0-549 550-624 625-699 700-799 800-1,000
Zero Score A Low Score Room for Improvement Good Great Excellent
0 1-299 300-499 500-699 700-799 800-1,000

What Factors Affect Your Credit Score?

Whether you want to maintain a high credit score or build your credit score from the ground up, you need to know what factors affect your credit, both positively and negatively. As you can see from the above tables, each of the three main credit reporting agencies in Australia – Equifax, Experian and illion – have their own credit scoring system, as well as their own way to score consumers. So, how does that work?

Each credit reporting agency collects data about you as a consumer to allow them to build your credit report. Using algorithms to weight that information, they create your credit score, which will change over time depending on how you interact with credit. In essence, your credit score is a numerical representation of the information contained in your credit report at any given time. Potential credit providers can then use that score to assess your creditworthiness.

Well then, what factors affect your credit score? Let’s take a look at what Equifax takes into consideration in order to determine your credit score.

  • Type of Credit Provider. There are different levels of risk involved in approaching different types of credit provider, so where you’ve applied for credit will be taken into account.
  • Type of Credit. Different types of credit also come with different levels of risk, so whether you’ve applied for a home loan or a payday loan will be significant.
  • Credit Amount. The credit limit or size of the loan you’ve requested will also be assessed.
  • Number of Credit Applications. Each time you apply for credit, a credit enquiry is recorded on your credit report.
  • Pattern of Credit Applications. Using this pattern of credit applications, you will be assessed for potential risk. For example, making lots of applications over a short space of time can negatively affect your credit score.
  • Age of Credit Report. With an older credit report, it’s easier to judge you as a consumer. If you are new to credit, you are an unknown commodity, making you higher risk.
  • Personal Details. Details, such as your age, length of employment, and time at your current address, all go towards assessing potential risk.
  • Defaults. Overdue debts, serious credit infringements and clearouts will likely have a negative effect on your credit score, while a lack of them may positively affect your score.
  • Court Writs and Default Judgements. Again, having these will likely reflect badly on you, lowering your credit score, while a lack of them should reflect positively.


How To Improve Your Credit Score

Time to start building your credit score? Let’s get into it.

Step 1. Find Out Your Credit Score

This one is a no-brainer. How can you improve your credit score if you don’t know what it is to start with? You can request a copy of your credit report from any of the three main credit reporting agencies, or you can go through an online provider that specialises in helping consumers get to know their credit.

You will need to provide some personal information when you apply, usually backed up by some form of identification. If you opt for the credit reporting agency route, you can usually apply for a copy of your credit report for free once a year, but paid services are also available. Online providers may also offer their services for free, while others may charge a fee.

Before signing up, be aware of what you are permitting those providers to do with your data, especially when dealing with those who don’t charge a fee. It’s also a good idea to find out which credit reporting agency they take your info from.

Step 2. Correct Any Errors

Your credit report contains a lot of information about you and your financial status. If you want potential credit providers to see you in the best light, it’s a good idea to make sure all the information they see is actually correct.

TIP: When you apply for credit, you don’t know which credit reporting agency the provider will use to check your credit score. Before you apply – or before you start your credit improvement journey – check your credit report with each of the three credit reporting agencies to ensure the information held within each one is present and correct.


  • If you find an error in your credit report, first report it to the credit reporting agency so they can investigate the matter. If the error is confirmed, it will be corrected within your credit report and updated free of charge.
  • If their investigation concludes that there is no error, you can then talk to the credit provider that reported the error. You may need to supply evidence that proves the error is incorrect. However, they must also supply you with evidence supporting their claim.
  • If the dispute is still not resolved, you have the option to raise the issue with the relevant ombudsman.
  • From there, your last port of call would be the Office of the Australian Information Commissioner (OAIC). Bear in mind, you must have attempted the previous three steps before the OIAC will hear your complaint.


Step 3. Make Positive Changes

Aside from correcting any errors on your credit report, the only way to increase your credit score is by making positive changes in the way you deal with credit. Fortunately, with Australia’s system of comprehensive credit reporting, it’s not just bad behaviour that affects your credit score. Your good deeds will also come into play.

  • Pay Down Your Debts: By paying down your debts, you reduce your risk as a potential borrower. This is especially true for credit card debts, so work on paying down your balances, reducing your credit limits, and closing cards you don’t need.
  • Pay On Time: Always make your repayments on time. Even one missed payment can significantly affect your credit score. However, a long history of making each payment by the due date can go a long way towards increasing your credit score.
  • Avoid New Applications: Every time you apply for credit, that application is recorded on your credit report. New credit enquiries – and taking on more debt – can affect your credit score, so try to hold back on new applications if you can.
  • Create A Budget: Try to create a budget that cuts out unnecessary spending, which then allows you to pay down debts while creating a buffer fund. This fund could prevent you from having to apply for credit in the future, while also giving you some peace of mind.
  • Update Your Details: If you move house, update your contact details, or change jobs, update all relevant parties, including your lenders. Not only is it important your details match up when you apply for credit, you also need to be able to receive bills in order to pay them on time.


Case Study

At 20, Emma has never applied for any form of credit, apart from a phone contract. She applies for a basic credit card with a low rate, low fee and low credit limit. She meets the minimum income requirements, and having been a good customer with the bank her entire life, she is approved for the card.

Knowing that her credit score is low and the information held within her credit report is limited, Emma uses her credit card to build her credit score over time. She uses the card regularly, but makes sure to pay it down to zero every week. She never misses a repayment, and never goes over her credit limit.

Within two years, Emma’s credit score has increased significantly, allowing her to apply for a car loan. After assessing her credit score and credit report, the car loan provider approves Emma’s application, and she then uses that loan to build her credit score even further.

Step 4. Monitor Your Progress

How long it takes for you to see improvement will depend on the state of your credit score when you start. The lower your score is, the longer it will take to improve. However, if your credit score is around average to start, you should expect to see improvement in 12-18 months. Keeping a close eye on your credit score can allow you to see it build over time, giving you motivation to keep at it.

It’s also worth remembering that the negative information held within your credit report will drop off over time, helping to increase your credit score as it does. Repayment history drops off after two years, while defaults, clearouts, writs, summons and court judgements are removed after five years. Serious credit infringements such as bankruptcy remain on your credit report for seven years.

TIP: Monitoring your credit report allows you to do more than just check your credit score. By checking your credit report regularly, you can keep an eye out for fraudulent activity and report it as soon as it happens. In doing this, you could limit the impact fraud could have on your credit score, making it easier to come back from.

Step 5. Get Some Help

Improving your credit takes time and effort – and a little help goes a long way. Which is where services such as Tippla come in. Having recently launched in Australia, online platform Tippla provides a way for Aussies to manage their credit scores, offering insight into what goes into their credit report, as well as how users can build their credit score over time.

Tippla Director, Layton Brooks, describes Tippla as a financial empowerment tool. “Very few people in Australia know how their credit score impacts their lives and we’re here to change that,” Layton says. “We’ve designed our dashboards in a way that allows members to easily digest complicated credit history, check their financial status and learn about credit.”

What Is Tippla?

On a very basic level, Tippla is an online platform that allows users to check their credit scores and monitor them over time. What sets Tippla apart from the competition, however, is the insight and information it provides to allow each user to build their credit score as they build their understanding of how the credit reporting system works.

“The customer is at the heart of everything we do and our core goal is helping members take back financial control,” Layton says. “Knowing your credit score is only half the battle – understanding how to improve your score over time and use it to your advantage is where customers see real wins.”

Which is where Tippla’s Credit School comes in. Offering a range of short courses packed with easy-to-digest information, Credit School provides all the essential info users need to know in order to improve their credit scores. “Our Credit School offers members real-life application of key financial information such as tackling debt and buying a car,” Layton says. “It’s like a maths lesson you can actually use!”

Another key factor that sets Tippla apart is the fact that it provides credit score info from not one but two of Australia’s main credit reporting agencies. So, instead of just seeing one report and one credit score when you sign up, you will see two – from Equifax and Experian – and you may be surprised to see they’re quite different in both the score they offer and the information they contain.

“Different bureaus hold different information about any one individual,” Layton advises. “We’ve gone for the multi-bureau approach so that our members don’t get any nasty surprises along their credit journey. It is not uncommon for our members to have a great credit score with one bureau and an average credit score showing defaults with another. This can be catastrophic when applying for services such as a home loan.”

But with knowledge comes power. Once you know what each credit reporting agency has to say about you, you can work on changing things – and if necessary, reporting any errors you find.

What about illion, the remaining major credit reporting agency here in Australia? According to Layton, Tippla is working closely with illion to integrate their credit reports into Tippla’s offering in the future.

What Does Tippla Offer?

Okay then, what exactly does Tippla offer?

  • Instant Access: After taking a few minutes to provide your personal identification details on sign-up, you will have instant access to your credit scores. On your dashboard, you will be able to see what your scores are with Experian and Equifax, with details of any new credit enquiries and your current credit accounts, any defaults or public records, and the personal info held on your file.
  • A More Complete View: With Tippla, you can see your credit score – and credit reporting information – from both Experian and Equifax. This can provide you with a more complete view of where you stand as a potential borrower, allowing you to correct any errors and work on building your score with each credit reporting agency. You can access your credit info 24/7, without worrying about this ‘soft’ credit check affecting your credit score in any way.
  • Easily Monitor Your Credit Scores: Over time, you can use Tippla to see how the changes you make impact your credit scores. You can also see which companies have searched your Equifax and Experian credit file in the past 24 months by looking in the ‘Search History’ of your report.
  • Fraud Protection: Helping to protect you against identity theft and fraud, Tippla provides monthly updates so you easily identify anything unusual or suspicious in your credit report. Spot something that shouldn’t be there? Tippla can even help you get it changed, fixed or removed to keep your scores intact.
  • Access to Credit School: Giving you the information you need to fully understand credit scores and how credit reporting works, Tippla’s Credit School offers quick, easy-to-understand online courses that provide all you need to know to make a positive impact on your credit score.
  • No Lock-in Contract: To take advantage of everything Tippla has to offer, you pay one small monthly fee, with no lock-in contract and no additional fees to worry about.

On top of all that, you can benefit from personalised offers that match your credit score, articles and news tailored to your goals, and a soon-to-be-released spending tracker that will allow you to see exactly where you’re spending your money – and where you could cut back.

How Does It Work?

When you sign up, you provide some personal details and identification information that allows Tippla to confirm you are who you say you are. You will have to provide your name, address and date of birth, plus some ID markers on your driver’s license and Medicare card for instant verification.

If Tippla cannot verify you, you will need to provide a bit more info, including photos of your identification and proof of address, as well as a selfie with you holding up a one-time code. This does feel somewhat like you’re providing ‘proof of life’ in a ransom movie, but it is for a good cause. You wouldn’t want just anyone accessing your credit info, after all.

Which brings us to data security. Security is something Tippla takes very seriously indeed. Tippla is not only incredibly vigilant about security and authentication, it also uses a 128-bit encryption and multi-level infrastructure to lock down members’ information.

“We take the handling of customer data very seriously, implementing best practice measures such as bank grade encryption to ensure the data is safe,” Layton says. “Our Privacy Policy is 100% transparent and lets [members] know exactly how we use their data to provide the services that we offer. We are always willing to speak with our customers to ease any worries they may have.”

In terms of day-to-day use of Tippla, you can expect monthly updates on your credit score, while accessing your info as often as you like. You can get schooled using Credit School, to then apply for credit products that match your credit score. Say what? Yep, Tippla allows you to see how likely you would be to get approved for certain credit products, giving you a ‘probability rating’ based on your credit score.

Where To Now?

As you continue to work on building your credit score, Tippla is also working on improving its offering, providing even more handy tools and functionality for you to take advantage of. According to Layton, credit reports “are just the start”.

“We are working on a range of exciting features that will contribute to improving the financial health of our members,” he says. One such feature is Opening Banking, which is due to be launched later this month. This spending tracker is designed to help users see what they’re spending and where, allowing them better insight into their spending habits.

With that knowledge, users can budget more efficiently, while continuing to improve their credit. From there, users can unlock unique partner offers that allow them to get better deals across a whole range of different services, from home loans and insurance, to telcos, utilities and so much more.

Sound good? Hit up the Tippla website to register today and view your credit score anytime, for free.


Disclaimer: The information contained within this post is general in nature and does not take into account your personal situation. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

Photo source: Pexels

Pauline Hatch

Pauline is a personal finance expert at, with 8 years in money, budgeting and property reporting under her belt. Pauline is passionate about seeing Aussies win by making their money – and their credit cards – work smarter, harder and bigger.

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Ask Pauline a Question

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6 comments (showing the latest 10 Q&As)



6 October 2021
Hi, I recently paid off my credit card and cancelled it without realising it would cause my score to go down. I now have no credit cards or loans. Is it possible to get it to go back up if I don’t have these types of credit? What would you suggest to do? Thanks!
    Roland B Bleyer - Founder


    6 October 2021
    Hi Kate, credit scores can be a frustrating thing! Guarded so secretly by the banks, but there are some things you can do to build it and prove your credit worthiness. You can check out our guide to building your credit score to find out more. Best of luck in your credit building journey!


11 May 2021
I've recently been repatriated in Australia, rely on income from overseas, have no credit score, never had a credit card in Australia (although have good score overseas), recently applied for a card and got declined. I'm financially stable, don't have any outstanding debt (never had any in Australia sadly). I feel like I just shot my own credit score, how do I get out of this rut?
Lee Cheng

Lee Cheng

22 December 2020
I am new migrant in Australia without credit history in Australia, what is the best and first credit card I can apply to establish a credit history?
    Roland B Bleyer - Founder


    22 December 2020
    Hi Lee, I would suggest you work for at least 6 months before applying. This is not a great card though good to start building credit - ANZ First. I suggest you use a service like They can assist you in understanding how to build your credit.

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