What your Equifax Score says about you as a borrower

On your credit file, held by Equifax (formerly known as Veda Advantage), there’s a score which compares you as a borrower to the rest of the Australian population.

This is known as your Equifax Score (previously VedaScore) and it’s one of the factors lenders consider when they assess your mortgage application.

Think you might have a poor credit score?
Talk to our experts to get a free assessment.

Do I have a good score?

As part of your home loan application, we obtain a copy of your credit file from Equifax.

The score provides us with a good indication of your strength as borrower.

So what’s considered a good Equifax Score?

  • Excellent: Any score above 700.
  • Good: Any score from 600 to 700.
  • Average: 550 is the average score.
  • Bad: Any score from 400 to 500.
  • Very bad: Any score below 400.

The average score for all Australians who are credit active is 550, however, your score can range from anywhere between -200 to 1,200.

Having a score of 550 would mean that you have a 1 in 12 chance of having a default lodged on your credit file in the next 12 months, whereas a score of 200 would mean you have a 1 in 2 chance.

It’s extremely rare to see scores higher than 900 or lower than 200.

How do I get a copy of my Equifax Score?

You’ll be able to see your Equifax Score /VedaScore when you apply for a home loan with one of our mortgage brokers.

Unfortunately, we cannot provide you with a copy of your Equifax Score.

If you’re still curious about your score, you can order a copy by contacting Equifax.

Check out their offers on their pricing page.

Their Starter Pack starts at just under $80 and includes your full credit report.

You’ll receive this report annually.


How does Equifax calculate your score?

Your Equifax Score is ultimately a score of all the details of your credit file.

Basic personal information
This includes your full name, date of birth, gender, address, previous address, drivers licence number, employer and previous employer.

If you’re a director or proprietor you should check both the indiviuals and commercial sections of your credit file.

The type of credit provider you applied with
There may be different levels of with each lender.

For example, a credit union may have a higher level of risk than a major bank or lender.

The nature of the credit or loan
Home loans and HELP Debt are seen as a lower risk than car finance or payday lending.

Credit enquiries
Loans that you have applied for in the last five years are listed as credit enquiries.

Defaults
Loans or accounts where you’re more than 60 days overdue are listed as defaults.

Court writs
A court writ is a formally written document that is issued by the court, usually because someone has lodged a court case against you.

Court judgments
Judgments are listed when you’re unable to come to a suitable agreement with the creditor

Bankruptcy history (including Part IX history)
Bankruptcy or entering into a Part 9 agreement will essentially bring your score to zero.


How do lenders use Equifax Score?

Many lenders have Equifax’s score feed directly into their own scorecard that they use to assess loan applications.

Others ignore the Equifax Score and just use the data from your credit file.

Whilst your score with Equifax will not be the only factor that the lender considers, it will make a big difference to the lender’s own credit score and the outcome of your application.

If this may be a problem for you then you can consider:

What is a negative Equifax Score?

If you have serious credit infringement then your score will be negative! It’s possible to have a score as low as -200.

However, if you have been bankrupt or been in a part IX agreement in the last 7 years then your score will be between -994 and -999.

Equifax decided to do this to better differentiate between the risk associated with different types of people who have been bankrupt.

We’re not aware of negative scores being used by any lenders at present, however, we expect that once the accuracy of negative scores is proven then some specialist lenders will use this in their assessment rather than their current risk matrices.

How can I improve my Equifax Score?

Improving your Equifax Score /VedaScore is different to improving your credit score with a particular lender.

Equifax Score is calculated looking only at your credit file, whereas a lender is looking at all aspects of your application.

There are a few simple steps that you can take to improve your Equifax Score.

  • Ask Equifax to fix up any data that’s incorrect.
  • Avoid moving address or employer unnecessarily.
  • Avoid applying for credit that you don’t need.
  • Avoid applying for credit with less reputable lenders.
  • Pay all of your debts and bills on time every time.
  • If you have any defaults then make sure that they are paid.

Why are “enquiries” so important?

While most people are aware that a bankruptcy, court writ or default will have a large effect on their Equifax Score, few people are aware that just applying for a loan can damage their credit file.

Each time you apply for a loan, the lender checks your credit history with Equifax, and Equifax records this as an “enquiry” on your credit file.

This data has a surprisingly large impact on your score! In particular, Equifax takes the following into account:

  • Number of enquiries: Too many enquiries makes you look like a distressed or desperate borrower.
  • Type of credit: If you apply for a mortgage then this is a low risk whereas someone applying for multiple credit cards is seen as a high risk.
  • Choice of lender: If you’re applying with lenders of last resort then this will have a bigger effect on your VedaScore than applying with a bank.
  • Shopping pattern: Applying for 3 credit cards over 3 years is seen as normal, however applying for three credit cards in one go is seen as a risk.

Positive credit reporting and Equifax Scores

At the moment, there is a limited scope of information that banks can access to get a picture of you as a borrower.

Since the rollout of positive credit reporting or comprehensive credit reporting (CCR) in 2014, a whole lot more of your credit history is available.

This has both a negative and positive impact on your Equifax Score /VedaScore depending on your situation.

Apart from the information that’s already available to credit providers, your Equifax Score (VedaScore) now takes into account the following:

  • The date a credit account is opened.
  • Current limit on credit accounts.
  • The nature of the credit account.
  • The date a credit account is closed.
  • 24 months account payment history which will tell the bank whether you paid the minimum amount required on your financial commitments each month or not.
  • A “default” is listed on your credit file for being late by 60 days or more and for amounts you owe over $150, which is up from $100. It will still remain on your file for 5 years.

Apply for a mortgage

Do you have a low Equifax Score /VedaScore? Our mortgage brokers are experts in credit scoring and know which lenders will assess your application favourably.

Please call us on 1300 889 743 or fill in our free assessment form and one of our mortgage brokers will let you know if you can qualify for a home loan.