A bad credit score in Australia is generally any score that falls into the “below average” or “poor” range, making it harder to access mainstream loans, credit cards, or rental properties. Lenders see low scores as a sign of higher risk, which can lead to declined applications or higher interest rates.
Key Takeaways
- A bad credit score in Australia is usually below 500 for Equifax and below 550 for Experian.
- Low scores signal to lenders that you may have a history of missed payments, defaults, or financial stress.
- Each credit reporting agency uses its own scoring range and categories.
- A poor score can limit your access to credit and result in less favourable borrowing terms.
- You can take steps to improve a low score, but negative, accurate information will remain on your report for several years.
What Counts as a Bad Credit Score?
Australian credit reporting agencies use different scales to rate your creditworthiness. Here’s how each agency defines a low or bad score:
Equifax
- Score range: 0 to 1200
- Below average: Under 500 is considered “below average” by Equifax, and signals a higher risk to lenders.
Experian
- Score range: 0 to 1000
- Below average: 0 to 549 is classified as “below average” and is likely to be viewed as poor by most credit providers.
Illion
- Score range: 0 to 1000
- Low: Scores below 299 are considered low, and those between 300 and 499 are “average” but still not strong for most lenders.
If your score falls in these ranges, you may find it difficult to get approved for loans, credit cards, or even rental properties.
What Leads to a Bad Credit Score?
Several factors can cause your credit score to fall into a low or bad category:
- Missed or late payments: Not paying bills, credit cards, or loans on time.
- Defaults: Debts of $150 or more overdue by 60 days or more.
- Bankruptcies or court judgments: Serious financial events recorded on your credit file.
- Multiple credit applications: Applying for several loans or credit cards in a short time.
- High credit utilisation: Using a large portion of your available credit.
- Short or unstable credit history: Limited track record or frequent changes in accounts.
What Does a Bad Credit Score Mean for You?
Having a bad credit score can impact your financial life in several ways:
- Loan and credit card rejections: Lenders may decline your applications.
- Higher interest rates: If approved, you may pay more in interest.
- Lower credit limits: Lenders may offer smaller amounts.
- Rental difficulties: Some landlords check credit scores before approving tenants.
- Limited options: Fewer choices for financial products and services.
How Long Does Bad Information Stay on Your Report?
- Missed payments: Up to two years.
- Defaults: Five years, even if paid off.
- Credit applications: Five years.
- Bankruptcies and court judgments: Up to seven years.
You can’t remove accurate negative information, but you can fix errors for free by contacting the credit reporting agency or credit provider.
Can You Get Credit with a Bad Score?
It’s possible, but options are limited. Some lenders and credit card providers offer products for people with low scores, but these often come with higher fees and interest rates. Responsible use of these products can help you start rebuilding your credit profile over time.
What to Do if You Have a Bad Credit Score
- Review your credit report for errors and dispute any inaccuracies.
- Pay all bills and debts on time.
- Limit new credit applications.
- Focus on reducing outstanding debts.
- Seek help from a financial counsellor if you’re struggling to manage repayments.
For more detailed steps, see our guide: [How to Improve Your Credit Score in Australia].
Related Topics for Further Reading
These resources can help you understand your position and take practical steps towards better financial health.
Conclusion
A bad credit score in Australia is typically anything below 500 (Equifax) or 550 (Experian), and it signals higher risk to lenders. While a low score can limit your financial options, you can improve your situation with consistent, responsible habits. If you need support or guidance, Easy Credit Repair is here to help. Check out our services or get a free quote.
Disclaimer: All information in this article is based on research and our views only. If you have questions about your credit score or need personalised advice, please reach out to us.
