Despite rising interest rates, Australians have improved their credit score over the past year.

The national average credit score rose from 846 in 2022 to 855 in 2023, according to an analysis of more than two million credit scores by credit bureau Equifax.

That means the average Australian has improved from ‘very good’ to ‘excellent’, based on Equifax’s gradings:

• Excellent = 853 to 1200
• Very good = 735 to 852
• Good = 661 to 734
• Average = 460 to 660
• Below Average = 0 to 459

Lenders generally check your credit score when you apply for a loan – and the higher your score, the more likely your application will be approved and you’ll get a lower interest rate.

To build and protect your credit score, Equifax recommends:

• Establishing a rainy-day fund
• Paying bills, loans, credit cards and rent on time
• Checking your score regularly (you can order a free copy of your credit report every three months)
• Closing unnecessary credit accounts
• Limiting the number of credit applications you make
• Contacting your lender if you’re worried about falling behind on payments