How Is a Credit Score Calculated in Australia? (2026)

Quick Answer: In Australia, credit scores are calculated by three independent bureaus — Equifax, Experian, and Illion — using proprietary algorithms that weight: repayment history (largest positive factor under CCR), defaults and court judgements (largest negative impact), credit enquiries, credit utilisation, account age and mix, and personal information accuracy. The formulas are not publicly released, but the inputs are defined by law under the Privacy Act 1988 and Credit Reporting Code.

Your credit score feels like a black box. You know it's important. You know it affects whether you get approved for loans and at what rate. But how exactly does the number get calculated?

The bureaus don't publish their exact formulas — they're proprietary and protected. But the data inputs they're allowed to use are defined by Australian law. Understanding those inputs lets you understand what drives your score up, what pushes it down, and where to focus.

The Three Bureaus and Their Score Ranges

Australia has three main credit bureaus, each producing its own score:

The same credit behaviour can produce different scores at each bureau — because different lenders report to different bureaus, and each bureau uses its own weighting algorithm. That's why checking all three, not just one, gives you the complete picture.

The Six Input Factors (and Their Approximate Weight)

No bureau publishes exact weightings. These estimates reflect the general consensus from bureau guidance documents, ASIC commentary, and the behaviour of scores across thousands of client cases:

Repayment history is the biggest ongoing positive driver — because under CCR, 24 months of on-time payments are now visible and rewarded. Negative entries (especially defaults) produce the biggest single-event score drops.

How Each Factor Is Calculated

Repayment history: Every month, lenders who participate in CCR report whether you paid on time, 30 days late, 60 days late, or 90+ days late. This rolling 24-month window means recent behaviour matters most. A late payment from 23 months ago has far less impact than one from last month.

Defaults: When a credit provider lists a default under the Privacy Act 1988 (overdue $150+, Section 21D notice sent, 30-day grace period elapsed), it triggers an immediate, significant score reduction. The exact drop depends on the score at time of listing, the amount, and the number of other negatives already present. Defaults compound — each additional one reduces the score by a similar or greater amount to the first.

Enquiries: Each hard enquiry reduces your score immediately. The reduction is small for a single enquiry in a healthy file, but the cumulative effect of multiple enquiries in a short period is significant — and the enquiries stay on your file for 5 years. Soft enquiries (your own checks, pre-qualification checks by some lenders) don't affect your score.

Credit utilisation: Bureaus calculate utilisation as the ratio of your outstanding balance to your total available credit limit across revolving accounts. A $4,000 balance on a $5,000 limit card signals financial stress even if you pay it every month, because the bureau records the balance at reporting date, not after payment.

Account age and mix: The algorithm rewards longer credit histories and a diverse mix of account types. Closing old accounts shortens your average account age and can temporarily reduce your score. Opening many new accounts at once does the same.

Real Case Study: Vanessa, Hobart — Understood the Maths, Knew Exactly What to Challenge

Vanessa, 36, a secondary school teacher from Hobart, had pulled her Equifax score and found it was 511 — Below Average. She had a strong repayment record on her credit cards and had never missed a mortgage payment. What was pulling her down?

Her credit file showed two things: a $490 default from a debt collection agency (originally a private health insurance debt), and four hard enquiries from applications she'd made 18 months earlier. The default was the primary driver — estimated 160-point impact. The enquiries contributed roughly 40 additional points of depression.

During her ACS assessment, we identified that the debt collection agency had not sent the Section 21D notice to Vanessa's current address — they'd used an address that was two years out of date at the time of listing. Under the Privacy Act 1988, proper notice must be sent to the credit provider's last known address for the debtor — if their records were outdated, the obligation was to take reasonable steps to locate the current address before listing.

We challenged the listing on that basis. The default was removed in 33 days. Vanessa's score moved from 511 to 681 — a 170-point improvement consistent with our estimate of the default's impact on her file.

Result: Vanessa's score moved from 511 to 681 in 33 days. She was approved for a car loan at 9.1% p.a. vs the 21% specialist quote she'd received. Subject to individual assessment; results may vary.

Frequently Asked Questions

Do all Australian lenders use the same credit score? No. Each lender chooses which bureau to query — or queries multiple bureaus. This means the score a lender sees depends on which bureau they use. Equifax is the most commonly used by major banks. Some lenders also build their own internal scorecards using bureau data, income information, and their own lending history, which can produce different outcomes than the bureau score alone would suggest.

How often is my credit score updated? Bureaus update your score in near-real-time as new data comes in. When a lender reports a new payment, account, or negative entry, the bureau processes it and recalculates your score within days. In practice, most accounts report monthly — so your score may shift meaningfully each month depending on what's been reported.

Why do I have a different score at each bureau? Because different lenders report to different bureaus. Your mortgage lender might report only to Equifax, while your credit card issuer reports to Experian and Illion. The data sets are different, so the scores differ. A default listed only at Equifax won't appear in your Experian or Illion score.

Can my score go up and down quickly? Yes. A single default listing can drop your score 80–200 points immediately. A default professionally removed can raise it by the same amount within days of removal. On-time payment history improves scores more gradually — typically 10–30 points per month across a sustained period. Enquiries cause small drops of 5–30 points immediately.

Do savings accounts or investments affect my credit score? No. Assets — savings accounts, term deposits, shares, property equity — are not credit data and don't appear on your credit file. They're assessed by lenders separately in serviceability assessments but have no direct effect on your credit score calculation.

Is my credit score calculated differently because I'm self-employed? Your self-employment status doesn't directly affect how the score is calculated — the algorithm processes the same input data regardless of employment type. However, lenders assess self-employed applicants differently in their serviceability checks, requiring 2 years of tax returns rather than payslips. Some lenders also apply more conservative income assessments for self-employed borrowers.

Find Out Exactly What's Driving Your Score

Understanding the theory is one thing. Knowing exactly what's on your actual file — and what can be challenged — is where the real improvement starts.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has achieved a 98% success rate on accepted cases since 2014. No Win No Fee.

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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. General information only — not legal or financial advice. External resources: Equifax Australia | Experian Australia | OAIC Privacy Act

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