Your Equifax Score is a summary of your credit information held by Equifax and indicates how finance or utility providers may view you when you apply for credit. Credit scores are dynamic and change depending on when the score is generated and in what circumstances it is requested.
Some lenders will use your credit report and Equifax Score, along with information on your application form or information they may have on you as an existing customer. The lender can assess all of this information against their own policies and lending criteria.
What are the types of credit applications?
There are multiple types of credit that a consumer can apply for. These applications or enquiries appear on your credit report and show future lenders or creditors what you have applied for in the past 2 years. These type of applications include:
- Personal loans
- Credit cards
- Mortgages
- Pay-day lenders (Afterpay)
- Utility providers
- Telecommunication providers
How do applications effect your Equifax credit score?
When you apply for credit or finance, whether you are approved for it or not, it has to appear on your credit report as an enquiry. When an enquiry or application is placed on your credit report, this also impacts and drops your credit score.
The more credit enquiries or applications you have, the lower the credit score will go. This is because to lenders or creditors, it seems that you were ‘shopping around’ for finance and it does not say whether this finance was approved or not.
In reverse, if you have limited credit applications then your credit score will be higher. This then improves your ability to be approved for finance.
How to maintain a good Equifax credit score
Maintaining a good Equifax credit score will allow you to have an increased chance of getting any and all finance applications approved. Ways that you can increase your credit score include:
- Make timely bill payments
- Keep your credit utilisation low (ideally under 30%)
- Limit the number of credit applications you make, especially in a short period
- Maintain a mix of credit types and long-standing credit accounts
If you need assistance with undestanding your Equifax credit score or find an issue on your credit report please call one of our credit report experts at Clear Credit Solutions on 1300 789 783 or if you fill in our enquiry form one of the team will give you a call today.
