Your Equifax Score is a summary of your credit information held by Equifax and indicates how finance and utility providers may view you when applying for credit. It is derived from information held on your credit report as held by Equifax when the score is requested. The Equifax Score is a number between 0-1200 and in simple terms, the higher your Equifax Score, the better your credit profile and the a lower credit risk.
Learn more in our infographic: What information goes into your credit profile and what can it be used for?
There are a number of key contributing factors that are taken into consideration when generating your Equifax Score:
Type of credit provider
The type of credit provider making an enquiry on your credit report (that is the type of credit provider you’ve applied for credit with) may impact your Equifax Score. For example, there may be different levels of risk associated with approaching a bank, store finance provider, hire-purchase and utility company for credit.
What’s more, research shows that there’s a different level of risk associated with lenders in particular industries. e.g. a non-traditional lender may have a different level of risk than a bank or credit union.
The type and size of credit requested in your application
Both the type of credit and size of the loan or credit limit you have applied for in the past can have an impact on your Equifax Score. E.g. mortgages, credit cards, personal loans and store finance may carry different levels of risk.
Number of credit enquiries and shopping patterns
Every time you apply for credit and a credit provider obtains a copy of your report, an enquiry is added to your credit report. This can include any loan, mortgage or utilities applications you may make.
Shopping around for credit and applying to a number of different credit providers within a short space of time may negatively impact your Equifax Score. It flags you as a greater risk than infrequent applications for credit with a few credit providers.
Directorship and proprietorship information
Directorship and proprietorship information on a credit report may impact your Equifax Score. If you’re a director or a proprietor it’s important to check the individual and commercial sections of your credit report.
Age of credit report
The date your credit report was created may impact your Equifax Score, e.g. a relatively new file may indicate a different level of risk than an older report.
Pattern of credit enquiries over time
The spread of activity over the credit report’s life to date can have an impact on your Equifax Score, e.g. a relatively new credit file with many enquiries may represent a different level of risk than an older file with only a few credit enquiries.
Personal details
Your Equifax Score takes into consideration personal details such as age, length of employment and length of time at your current residential address to assess risk.
Default information
Default information in your personal or business credit report such as overdue debts, serious credit infringements or clearouts may negatively impact your Equifax Score, while a lack of default information in your file may positively affect your score.
Court writs and default judgements
A court writ or default judgement on a credit report is an indicator of increased risk and may negatively impact your Equifax Score. On the other hand, a lack of court writ or default judgement information would indicate a reduced level of risk.
Commercial address information
Information such as location and the length of time you have resided at your current business address is a measure of stability and may impact your Equifax Score.
Learn more: Check out our infographic to learn what information goes into your credit profile and what it can be used for.
It is important to note that the way the Equifax Score is used in practice by lenders may differ to the way it is displayed in the Equifax Credit and Identity portal. Each lender may also apply their own lending criteria and policies, and in some cases their own scores, which is why some lenders may approve your application while others will not.
Why does my Equifax Score change?
Your Equifax Score is calculated based on the information on your Equifax credit report at a point in time. As the information on your Equifax credit report changes so will your Equifax Score.
Your Equifax credit report is updated as your repayment history information on accounts is updated each month and as other information is added or removed from your credit report. Information from credit providers would include credit enquiries (applications) or overdue debts for example; or from third parties such as default judgements, court writs and Bankruptcy Act information.
What is the difference between a credit score and a credit report?
A credit report is the detail of your credit history to date whereas a credit score is simply a number which is derived from the information on an individual’s credit file as held by the credit reporting body (CRB) when the score is requested.
Your credit score does not form part of your credit report, rather it is derived from the information available on your credit file at a specific point in time.
What is the Score Tracker from Equifax?
The Equifax Score Tracker is a tool that tracks your Equifax Score over time. Each month it charts your Equifax Score, helping you to gain insight into what is impacting your Equifax Score and how you could improve it.
When you sign up to an Equifax Premium or Equifax Ultimate annual subscription, each month we’ll generate an Equifax Score which you will receive together with a graph that charts your score. You’ll also receive information regarding what items on your Equifax credit report contributed to your Equifax Score at that point in time.
Your Equifax Score may change every time new activities, such as credit enquiries or loan defaults, are recorded in your Equifax credit file.
It’s important to note that when a credit provider applies to obtain a credit score calculated by Equifax to use or review in the process of assessing your application for credit, the credit score that the credit provider receives is calculated at the time they do their credit check on you for a credit application and may change depending on the circumstances in which you have made a credit application. The Equifax Score that you receive through an Equifax Premium or Ultimate monthly plan (or an old Equifax Plan or Premium annual subscription) is not necessarily the same credit score a credit provider would obtain from Equifax. Each lender may also apply their own lending criteria and policies, and in some cases their own scores, which is why some lenders may approve your application while others will not.
However, by monitoring your Equifax Score over time, you’ll see how your Equifax Score changes depending upon the information on your credit report, and be able to track when your score improves over time.
You’ll also have a better indication of how lenders see you based on the information on your Equifax credit report.
How often does my Equifax Score get updated?
Your Equifax Score is calculated at a point in time and will change each time new information is added to your credit report.
With an Equifax subscription that includes an Equifax Score you will receive a new Equifax Score within your portal each month. A monthly email will notify you that your new Equifax Score is available within your Equifax Credit and Identity portal.
Please note that whilst Equifax calculates your Equifax Score for you every month as part of Score Tracker, when a credit provider uses Equifax Score as part of assessing an application for credit, the score they receive is calculated at the time they do their credit enquiry and may be different to your Equifax Credit Score in the Score Tracker. The way the Equifax Score is used in practice by lenders may differ to the way it is displayed in the Equifax Credit and Identity portal. Each lender may also apply their own lending criteria and policies, and in some cases their own scores, which is why some lenders may approve your application while others will not
What are credit score contributing factors?
Contributing factors are the items on an Equifax credit report that impact the Equifax Score at a point in time. With an Equifax Premium or Equifax Ultimate subscription you will see the top four contributing factors. The arrows next to the contributing factors show how much impact, positive or negative, that factor played in your Equifax Score.
What do the different score bands mean?
The different Equifax Score bands help you to understand your level of risk, based on your Equifax Score, compared to the Australian credit-active population held by Equifax.
The Equifax Score bands are based on historical analysis that determines how likely an adverse event, such as a default, court judgement, personal insolvency or similar, is to be recorded on a credit report in the next 12 months. This a key determining factor in whether you are likely to be able to repay future credit.
Below average (Bottom 20%) - An adverse event is more likely to be recorded on a credit file in the next 12 months.
Average (21% - 40%) - An adverse event is as likely to be recorded on a credit file in the next 12 months.
Good (41% - 60%) - Scores in this category indicate that an adverse event is less likely to be recorded on a credit file in the next 12 months. The odds of no adverse events occurring on your credit file in the next 12 months are better than the average population odds.
Very Good (61% - 80%) – It is unlikely an adverse event is to be recorded on a credit file in the next 12 months. In other words, the odds of no adverse events occurring on your credit file in the next 12 months are more than 2 times better than the average population odds.
Excellent (81% - 100%) - An adverse event is highly unlikely to be recorded on a credit file in the next 12 months. In other words, the odds of no adverse events occurring on your credit file in the next 12 months are more than 5 times better than the average population odds.
Equifax reviews the Australian credit-active population scores regularly and the Equifax score bands are calculated to take into account population and economic changes.
It is important to note that the way the Equifax Score is used in practice by lenders may differ to the way it is displayed in the Equifax Credit and Identity portal. Each lender may also apply their own lending criteria and policies, and in some cases their own scores, which is why some lenders may approve your application while others will not.
