What is a credit score?

Lenders use your credit score to assess your mortgage application. Your credit score is based on your credit file and information you provide in your application. It will vary from lender to lender, according to their loan criteria.

(not to be confused with loanScore) A lender uses a credit score to determine a borrower’s risk profile. In Australia this is made up of two numbers:

  • one from an individual’s credit file,
  • the other from the lender itself determining how well the applicant meets their lending criteria.

How is my credit score calculated?

All the information about your credit history is available in your credit file. This information is analysed using the Equifax Credit Score – a model that predicts the risk a lender would take in lending you money. Once you submit an application for a home loan, the lender will request your credit file. They use its rating to calculate your overall credit score alongside other key details from your application:

  • income,
  • assets,
  • living costs, and
  • outstanding debts.

What is considered a good credit score?

Most lenders will not allow you to see the credit score that they give you; they will only advise you on the outcome of your application. However, you are able to access the credit score from your credit file. This ranges from 0 to 1200. Higher scores indicate lower credit risk. A score of 700 and above is considered ‘good’.

What type of information does my credit file contain?

Your credit file contains information from credit providers and the public record. It will include:

  • Personal identifying information;
  • Repayment histories on credit cards, loan and mortgages;
  • Types of credit you already have;
  • Number of credit enquiries in last 12 months;
  • Default information. When you request your credit score, you will also receive details on what factors have influenced your rating. This information may enable you to improve your score over time.

How can I check my credit file?

In Australia, you can access your credit file for free once a year by contacting one of the following Credit Reporting Bodies (CRBs):

How can I raise my credit score?

You can improve your credit score with good financial management:

  • Pay all your bills on time;
  • Settle any defaults;
  • Avoid applying for credit you don’t need;
  • Be wary of applying for credit with less reputable lenders (this may indicate financial distress and negatively impact your rating). Managing your finances well before you apply for credit will increase your chances of getting approved.

How do lenders calculate my credit score?

Your credit score from your credit file will remain the same – at a point in time – regardless of which lender you choose to apply for a home loan with. However, your overall credit score will vary from lender to lender. Lenders calculate this score not only by the information on your credit file, but also on the information you provide in your application. Each lender has a different method of determining this score – so some may assess you more favourably than others. An uno adviser can look at your personal circumstances and advise you on which lenders are more likely to approve your application. This can help you avoid having your application rejected and protect your credit file from the negative effects this could have on it.

What results might I get?

A lender takes information from your application and credit file and uses their own algorithms to calculate your credit score. They will base their decision on this computer-generated result, which could be:

  • Pass – your credit score is good and you should be able to secure a home loan.
  • Decline – your credit score is lower than it needs to be, so lenders will decline your application on the spot.
  • Refer – the computer was unable to calculate your credit score, either:
  • The information you provided was incomplete, or
  • Your credit score is stuck between a pass and a fail. If your application receives a referral, there’s still a possibility of getting your home loan application approved. It will be forwarded to a credit manager to assess it manually.

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June 21, 2024
I only have praise from my Uno experience! I was a broker sceptic, having done all of the hard work myself for my first two property purchases and sale. I'm now a proud broker advocate having used UNO (Karis Churchill) for two refinances and purchase. The value add Karis brought cannot be underrated! Not only has Karis got me the best rate, with a bonus cash back (nearly unheard of in this climate), she has done it with the least back-a-forth and with the least administrative burden on me (the thing that can deters people from refinancing to begin with). Karis is always on top of everything. Karis knows her stuff. She is the most responsive of any professional service provider I've ever used (my banker never text with an update at 7pm on a Sunday) without being overbearing. You know she's got your back and in my experience the value speaks for itself. Thank you to the whole UNO team, thank you especially to Karis.
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Regarding UNO Home Loan services. I had great experience with uno home loans, Michael parsons was my broker for UNO Home Loans we had excellent communication throughout the whole home loan application. If I had any questions on home loan application which were many were answered in great detail. He had the time to assist me in filling out endless application forms at anytime through the day or night which made the application process stress free. So I would strongly recommend Michael parsons from UNO Home Loans to try his services you will not be disappointed. Thanks to Michael parsons I have the lowest home loan interest rate I could ever hope for which I particularly ask for. It’s was a pleasure working with him. And will be using his services in the near future.
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First time I have used a Broker and I must say Andrew Wyers and his team were amazing to work with and handled my refinance from a Big4 bank. He was able to understand my needs and find a lender that will be able to help me grow my investment portfolio. Andrew and his team kept me updated as part of my refinance journey and made the process super easy and I was able to refi to new lender in under 2 weeks. Would highly recommend Andrew.
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