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 best unsecured personal loans here. Or search for competitive car loans here.