How does my credit score help me get a loan? | Personalloan | InfoChoice
Subscribe to InfoChoice to receive

Special offers
Exclusive offers
Market data, trends and insights

How does my credit score help me get a loan?

How does my credit score help me get a loan?

Your credit score is a report about your ability to repay loans and debts, and pay your bills on time.

A relatively new, comprehensive credit rating system is being rolled out in Australia whereby consumers are given a score, a number from 1 to 1200 that indicates their likelihood of “experiencing an adverse credit event in the next 12 months.” In other words, how likely are you to default on a loan or credit card repayment? The score is based on reports from banks and other financial institutions, mobile phone companies, credit and store card issuers, loan providers and utilities like electricity providers.

You can find out your credit score, for free, by contacting one of three Australian credit reference agencies. The largest credit agency is Veda. The others are Dun & Bradstreet and Experian.

What is the average Australian credit score?

The national average VedaScore is 757, Fairfax Media reported this week. A VedaScore of 200 indicates a 50 per cent chance of an adverse credit event inside the next 12 months. 2.86 million Australians have a credit score of 200 or less, meaning they are at risk of default. 75 per cent of Australian consumers don’t know what their credit score is

Your credit score can help you get a loan

If you are rejected by a bank or credit union for a loan, you may like to get a copy of your credit score or report. It may have errors that can be corrected. Of it may have defaults that you don’t know about. Fixing your credit report can improve your chances of being approved for a personal loan, credit card or home loan.

How to get a personal loan you can afford

Do you know how much you can afford to repay? You can use the InfoChoice Budget Planner Calculator to plan your finances. And use the easy InfoChoice Personal Loan Repayment Calculator to find out what loan you can afford to repay.

I have a bad credit score. Can I still get a loan?

You may still be able to get a loan if you have a bad credit score, if you have a reliable income and can show that you can repay the loan. Now a new breed of lenders are taking on the big banks and providing loans with rates that are set according to your credit score.

People with low scores can still get approved, but have to pay a higher rate of interest to over the extra risk they represent. For example, RateSetter’s Unsecured Personal Loan has rates from 4.04 per cent to 10.16 per cent, based on your credit score.

I have a great credit score. Can I get a better deal?

Yes you can. Some lenders will give you a better rate because of the low risk you represent. For example SocietyOne has a Low Rate Loan for Excellent Credit..

You can search for competitive unsecured personal loans here.

Or search for competitive car loans here.

Previous Article  

Today's Loan Rates

Institution Product Rate (%) Comparison
Rate* (%)
Personal Loan - Unsecured 11.99 14.06 Go to site
Unsecured Personal Loan 11.99 14.06 Go to site
Personal Loan - Secured 12.74 8.11 Go to site
Car Loan 12.74 13.62 Go to site
Car Loan 12.74 13.62 Go to site
Institution Product Rate (%) Comparison
Rate* (%)

The comparison rates are calculated on variable and fixed rates (unsecured loans) $10,000 over 3 years & secured car loans $10,000 over 3 years. WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
For information on how we’ve selected these “Sponsored” and “Featured” products click here.


Find out more

Twitter Facebook

© InfoChoice Pty Ltd ABN 93 061 105 735 AFSL and Australian Credit Licence number 349445

Although we cover a range of products, providers and services we don't cover every product, provider or service available in the market. The information and products contained on this website do not constitute recommendations or suggestions to purchase or apply for any particular product. Products included on this site may not suit your personal objectives, financial situation or needs. Please consider whether it is appropriate for your circumstances, before making a decision to purchase or apply for any product. If you are considering acquiring any financial product you should obtain and read the relevant Product Disclosure Statement or other offer document prior to making an investment decision.

Go to top