RW - foRWard Health & Wellbeing eMag - May 24 - Flipbook - Page 59
The concept of 昀椀nancial
wellness includes the
establishment and upkeep
of a posi琀椀ve credit pro昀椀le,
which serves purposes beyond
borrowing funds. Discover
why maintaining good credit
is vital for your 昀椀nancial
health and overall peace of
mind, along with strategies to
achieve a posi琀椀ve credit ra琀椀ng.
Understanding credit scores,
reports, and the journey
towards rebuilding good
credit are key to safeguarding
your 昀椀nancial wellbeing.
Your credit scores can exert
a signi昀椀cant in昀氀uence on
your capacity to obtain loans,
secure a mortgage, or lease a
property. However, take heart!
Naviga琀椀ng the intricacies of
the credit landscape is more
manageable than it may appear
at 昀椀rst glance.
a 昀椀nancial grade that banks
and lenders use to decide
how risky it is to lend you
money. Higher scores indicate
lower risk, making you a more
a琀琀rac琀椀ve borrower.
How Are Credit Scores
Calculated?
Credit repor琀椀ng agencies
calculate your score based
on your credit report, which
includes your borrowing history,
credit applica琀椀ons, repayments,
defaults, and bankruptcy
informa琀椀on. Key factors
in昀氀uencing your score include:
• Repayment history
• Credit u琀椀lisa琀椀on ra琀椀o
(how much credit you’re
using versus how much
you have available)
• Length of credit history
• Types of credit accounts (e.g.,
credit cards, personal loans)
• Frequency of credit
applica琀椀ons
Understanding Credit Scores
Your credit score, is a number
typically ranging from 0 to
1200 in Australia and acts
as a snapshot of your credit
‘worthiness’. Think of it as
What’s a Good Credit Score?
A good credit score can be
anything above 500, but it
really depends on which of the
3 credit repor琀椀ng bodies you
get it from - Experian, Equifax
or Illion.
What is considered a
“good” credit score?
• Experian: 625 to 699 is a
“good” credit score
• Equifax: 661 to 734 is a
“good” credit score
• Illion: 500 to 699 is a
“good” credit score
Credit repor琀椀ng bureaus also
have di昀昀erent credit ra琀椀ng
ranges for Australia, so what
counts as a good credit score
here will be di昀昀erent to other
countries such as the USA.
Finder data shows 79%
of people have a good
credit score or higher.
But 21% of people
have an average or
below average score.
Roughly two-thirds
(69%) of Australians
don’t know their credit
score, and 6% don’t
know what a credit
score is. This is despite
45% of those who
have their credit score
saying it helped them
make be琀琀er 昀椀nancial
decisions.