Credit File vs Credit Score: What’s the Difference?

You probably know that taking care of your credit is important if you’re planning some financial milestones such as upgrading your car or buying your first home. After all, lenders assess your credit to decide whether you’ll get the best loan terms, or whether they’ll lend to you at all.

But how do you know if your credit is in good shape? Understanding your credit file and credit score is the key.

Credit file vs credit score whats the difference - Two different circles

What is a credit file?

Your credit file contains information that reflects your history with credit and service providers. It is updated with details such as:

  • Your personal details
  • Credit applications (credit cards, personal loans, mortgages, etc.) This includes any loans you’ve agreed to be a guarantor for
  • Details of any joint applications you have made with someone else
  • Defaults
  • Debt agreements
  • Commercial and business loan applications

This file is created and stored by one (or more) of the four credit reporting agencies in Australia. They are:

  • Dun and Bradstreet
  • Equifax (previously known as Veda Advantage)
  • Experian
  • Tasmanian Collection Service

Each time you make a credit application, for example a mobile phone contract or utility service, the lender or service provider will notify a credit reporting agency of your application. This notification will include the date, the amount of credit, and your personal details.

Your personal details are kept on your credit file forever. All other details have expiry dates ranging from two years up to seven years. You may have a credit file with one, some or all of the Australian credit reporting agencies. Be aware that your credit file will most likely vary between agencies because a lender/service provider may not send your information to every agency when you apply for credit.

What is my credit score and how can I improve my score?

Your credit score, also known as your credit rating, provides a snapshot of your “creditworthiness” to lenders/suppliers. It is calculated using the information contained in your credit file.

Each of the four credit reporting agencies in Australia have a different system of calculating your score and use different value ranges. For example, with Equifax the range is between 0-1,200. The higher your score, the more likely your credit application is going to be approved.

Your credit score is calculated by assessing five factors. Included with each of these factors is a tip to improve your score:

  • Payment history (whether you make payments on time)
  • Amounts owed (how much you owe across all your credit accounts)
  • Length of credit history (The ages of your oldest credit account, your newest account and the average age of all of them)
  • Credit mix (having a combination of different types of credit accounts can boost your score)
  • New credit (opening several lines of credit within a short period of time can hurt your number)

Each time you take out a new loan, or if an entry in your credit file is expired, your credit score will update to reflect your current circumstances.

You can fix your credit file and improve your credit score by limiting how many loans you apply for, avoid making defaults on your repayments, and monitor your credit file to ensure you are not the victim of identity fraud. You can set up alerts on your credit file to make you aware of this, should it occur.

Can I check my credit file and credit score?

As your credit file and credit score are regularly updated across a number of credit reporting agencies in Australia, it may seem daunting to access your information, though actually it is quite straightforward to perform a credit file check. You can obtain a free credit report from a credit reporting agency once a year for free.

A credit report is an extract from your credit file, outlining what is on your credit file at a particular time. However, it’s important to note that your credit report will likely not contain your credit score, unless you request it specifically and pay a fee.


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