500 Credit Score in Australia — What It Means & How to Fix It

Quick Answer: A 500 credit score on the Equifax scale (0–1,200) is in the Below Average band. Credit repair is the priority. Most mainstream lenders will decline at this level. The key to moving your score from 500 toward higher bands is understanding exactly what's causing it — whether that's defaults, late payment markers, high credit utilisation, or excess enquiries — and addressing each one systematically. If incorrect entries are suppressing your score, Australian Credit Solutions can dispute them under the Privacy Act 1988. 98% success rate. No Win No Fee. ASIC ACL 532003. Industry Excellence Award 2022, 2023 & 2024. 4.9/5 from 976+ reviews. Over 5,000 Australians helped since 2014.

What a 500 Score Means in Australia

Australian credit scores are not universal — different bureaus use different scales. Here's where 500 sits across all three:

Your score may vary slightly between bureaus depending on which lenders report to which bureau — check all three.

What Typically Causes a 500 Score

A score in the 500 range almost always means one or more of the following: a formal default (the most damaging single event), a court judgement, multiple missed payment CCR markers, an enquiry cluster from multiple rejected applications, or a combination of all of these. A 500 score doesn't happen from thin credit history alone — there's almost certainly a specific negative event suppressing the score. A score around 600 typically means: one or two CCR late payment markers (2-year visibility), a single older default that's beginning to age, a moderate number of enquiries, or slightly high credit utilisation. It's the 'warning zone' — not catastrophic but limiting access to competitive products. A score around 700 is generally the result of: a mostly clean credit file with perhaps one older minor negative entry, low-moderate credit enquiries, and a reasonable repayment history length. You're eligible for most credit products — the question is whether you're getting the best available rate.

What Lenders Think When They See 500

Big 4 banks (CBA, ANZ, Westpac, NAB): Likely automatic decline for most products. Second-tier banks: Possible for secured lending with significant deposit; unlikely for unsecured. Specialist lenders (Pepper Money, Liberty Financial): Will consider — at higher rates. Non-bank lenders: Most accessible tier — rates significantly above standard. Home loan: Very difficult without significant credit file repair first. Big 4 banks: Marginal — may consider with strong income, but scrutiny is high. Second-tier banks: Possible — case-by-case assessment. Specialist lenders: Generally accessible — rates above standard but not extreme. Home loan: Possible with specialist lenders; may require larger deposit (15–20%+). Big 4 banks: Generally accessible — some rate premiums may apply. Second-tier banks: Fully accessible — competitive rates. Specialist lenders: Best available rates from this tier. Home loan: Accessible at most lenders — 5–10% deposit typically sufficient.

How to Move Your Score from 500 Toward 600+

Priority 1 — Credit file repair: At 500, the most impactful action is almost always disputing incorrectly listed defaults or enquiries. A single default removal can add 80–150+ points. Get your credit reports from all three bureaus and contact Australian Credit Solutions for a free assessment of what's disputable.

Priority 2 — Stop the bleeding: No new credit applications while the file is damaged. Every rejection creates another enquiry. Pause all applications and fix the file first.

Priority 3 — Reduce utilisation: If credit cards are over 50% utilised, paying them down produces score improvement within 30–60 days. Priority 1 — Identify what's dragging you down: Pull all three reports. If there's a default, assess whether it has dispute grounds. If CCR markers are the cause, they'll age out in 2 years — or you can accelerate improvement by reducing utilisation and maintaining clean repayments.

Priority 2 — Reduce credit utilisation below 30%: If credit card balances are above 30% of limits, this is fast improvement territory.

Priority 3 — Limit new applications: Enquiries at 600 are particularly costly. Only apply for credit you're likely to be approved for. Priority 1 — Check for any removable remnant entries: A score of 700 with one older entry still showing may jump significantly if that entry has dispute grounds. Worth checking before accepting 700 as your ceiling.

Priority 2 — Manage utilisation tightly: Below 20% utilisation is where scoring improves from Good toward Very Good.

Priority 3 — Extend repayment history depth: Keep existing accounts open and active. A 5-year-old credit card in regular use is a positive scoring signal.

Case Study: Amir, Sydney — From 491 to 601 in 45 Days

Chloe, Brisbane — From 588 to 681 in 60 Days Ben, Melbourne — From 693 to 748 in 50 Days

Amir, 35, a logistics coordinator from Parramatta, had a 491 Equifax score driven by two defaults — a 80 Optus mobile default and a $1,200 Latitude personal loan default. Both had Section 21D notices sent to his previous Auburn address (he'd moved 4 months before each notice was issued). Australian Credit Solutions disputed both on address grounds. Both removed within 45 days. Score moved from 491 to 601. Personal loan approved for home deposit savings at Pepper Money the following month. If you need professional help, explore our credit repair for home loan approval service. Chloe, 28, a graphic designer from Woolloongabba in Brisbane, had a 588 score with 3 CCR late markers from 2023 (missed 3 consecutive months on a credit card during a job transition) and credit utilisation at 58%. She reduced utilisation from 58% to 22% over 3 months by paying down the card balance. The CCR markers remained — they'll age out in 2025. One duplicate enquiry from a lender who ran two checks on the same day was removed through a quick dispute. Score moved from 588 to 681 over 60 days. Car finance approved at standard rate. Ben, 41, an accountant from Richmond in Melbourne, had a 693 score — frustratingly just below the Good tier. A 2-year-old Telstra default of $340 was the culprit. Australian Credit Solutions identified that the Section 21D notice had been sent to Ben's former employer's address (he'd used his work address at the time). A residential address, not a work address, is the relevant address for Section 21D purposes. Telstra removed the default within 50 days. Score moved from 693 to 748. Home loan at Big 4 bank approved at standard rate.

Amir Chloe paid nothing until we succeeded.

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Frequently Asked Questions

Is 500 a good credit score in Australia? A 500 credit score on the Equifax scale is in the Below Average band. This is a Below Average score — most mainstream lenders will decline or significantly restrict access at this level. Credit file repair is the highest-priority action. For more detail, see our guide on average credit score in australia: by age & bureau. This is an Average score — some lenders will work with you, particularly specialist and non-bank lenders. Mainstream banks may be selective. There is usually room for meaningful improvement. This is a Good score — most lenders will work with you at generally competitive rates. You're close to the Very Good band where the best rates become available.

What does a 500 credit score mean for a home loan in Australia? A 500 credit score makes standard home loan approval very difficult — most banks will decline, and specialist lenders will require significant deposits (20–30%+) and charge premium rates. Credit file repair to address the underlying negative entries before applying is strongly recommended. A 600 credit score is on the borderline for home loan approval. Major banks may decline; specialist lenders (Pepper Money, Liberty Financial) and non-bank lenders will consider applications with appropriate deposits. Rate premiums of 1–3% above standard are typical at this score level. A 700 credit score gives access to most home loan lenders at standard rates. You may face slightly higher rates than the best-credit customers, but the premium is typically small. Most banks will approve with standard deposit requirements (5–10% with LMI or 20% without).

What is causing my 500 credit score in Australia? A 500 score almost always indicates one or more major negative entries: formal defaults (the most common cause), court judgements, bankruptcy, or a combination of CCR late markers and high utilisation. Pull your reports from Equifax, Experian, and Illion to identify the specific entries. A score around 600 typically reflects: one or two CCR late payment markers from the past 2 years, moderate credit enquiries, slightly high utilisation, or a single older default that's beginning to age. Review all three bureau reports to identify the specific factors. A 700 score typically reflects a mostly clean file with perhaps one minor older entry, moderate enquiry activity, or utilisation in the 30–50% range. Small improvements in any of these areas can push the score into the Very Good band.

How can I improve my 500 credit score in Australia? The fastest path from 500 upward: (1) get credit reports from all three bureaus and identify disputable entries, (2) engage Australian Credit Solutions for a free assessment — default removal is the single most impactful intervention at this score level, (3) stop all new credit applications while the file is being repaired, (4) reduce credit card utilisation below 30%. From 600 upward: (1) identify whether any entries are disputable (particularly defaults with address errors), (2) reduce credit card utilisation below 30% — fast improvement within 60 days, (3) limit new credit applications, (4) maintain clean repayment history going forward. From 700 upward: (1) check for any remaining disputable entries — even one older default removal can add 50–80 points, (2) reduce utilisation to below 20%, (3) keep existing accounts open and active, (4) avoid unnecessary new applications.

How long does it take to go from 500 to a higher credit score in Australia? Moving from 500 toward 600+ can happen in 30–60 days if incorrectly listed defaults are removed through professional dispute. Without dispute, recovery depends on negative entries aging out — defaults take 5 years to expire. The fastest path is always to assess what's disputable first. Moving from 600 to 650–700 typically takes 3–12 months of clean repayment history, utilisation reduction, and allowing CCR markers to age. If a default is present and disputable, professional removal can accelerate this significantly. Moving from 700 to 750+ can happen in 30–90 days if a remaining disputable entry is removed. Without active dispute, organic improvement through clean history and utilisation management typically takes 6–18 months.

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Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.