What is a bad or poor credit score?

In Australia, credit agencies including Equifax, Experian and Illion provide credit reports and credit scores. There may be slight differences in your credit score with each agency, and they are used by different lenders.

The credit score bands used are from Equifax:

Excellent: 1,200 – 841
Very Good: 840 – 756
Good: 755 – 666
Average: 665 – 506
Below average: 505 and below

A credit score band of “below average” means you are in the bottom 20% of the credit-active population and are more likely to have an adverse event in the next 12 months than the wider population, on average. A credit score band of “average” means an adverse event is likely in the next 12 months when compared to the wider population.

For Experian, scores are ranked from 0 to 1,000. A Below average score that is likely to be considered poor by a credit provider ranges from 0–549. A Fair score, which is still below the average, ranges from 550–624.

For Illion, scores are also ranked from 0 to 1,000, with a Zero score indicating there’s something negative in your credit history, such as a court judgement or bankruptcy; a Low score of 1–299 meaning you are likely to have some negative data on file; and a Room for improvement score of 300–499 implying your score still requires some improvement.

How long does a poor credit rating last?

Your credit rating, or credit score, is based on the information shown in your credit report at a given time. Equifax gives the following timeframes for how long different kinds of information may stay on your credit report:

Two years	Five years	Seven years
Repayment history information	Any credit enquiry Overdue accounts listed as a payment default Overdue accounts listed as clearouts (where you can’t be contacted, a lender can immediately list the debt as a clearout and does not need to wait 60 days) Writs and summons Court judgments	Overdue accounts listed as a serious credit infringement

Source: Equifax

With bankruptcy, debt agreements and personal insolvency, when you enter into an agreement and when it ends can affect how long the information is kept on file. For example, Experian says a bankruptcy will remain on your credit record for five years from the date of listing or two years after discharge, whichever is greatest.

If you pay an overdue debt, it will still generally be listed on your credit report for five or seven years (depending on the type of overdue debt). However, your credit report will be updated to show you have made payments, which could help your score start to improve.

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At Clear Credit Solutions we can help you repair bad credit fast.

When it comes to credit defaults, court judgements and clear outs we are the experts and are happy to help you move forward. Fill out the contact form or call 1300 789 783