What is a credit score?

Credit scores are so important as they can impact your financial future. Read on to learn all about them.

The nmoni difference:

What is a credit score?

It’s really important you understand what credit scores are as they play a major role in not only deciding if you can get a loan, but what rate you might qualify for. Read on for our comprehensive guide on the important things you need to know about your credit score.

What is a credit score?

A credit score is a number generated by credit reporting agencies that provides an indication of your credit worthiness. Your credit score (or credit rating) is one of the major tools lenders use to assess:

  1. Whether they will give you a loan
  2. What risk profile you fall under
  3. What rate they will offer you.

A credit score is really important for these reasons as they can significantly affect your ability to get a loan and how much that loan will cost (the interest rate and other charges).

Who calculates my credit score?

There are several credit reporting agencies but here are the 3 most commonly used ones:




Below we will explore some of the factors these credit agencies use when providing a credit score.

How do they calculate my credit score?

The exact formula is not disclosed by these credit reporting agencies and they can vary from agency to agency. There are however several key factors that they consider:

The amount of money you’ve borrowed.
Credit limits, who lent you money and whether these loans are open or closed are considered.

The type of credit you’ve applied for.

Mortgages, credit cards, personal loans and store finance can carry different levels of risk and therefore impact your credit score in different ways. Buy now pay later schemes can also negatively impact your credit score.

The number of credit applications you have made.
All past applications for credit are considered in your score. You can actually hurt your credit rating if you apply for a loan with lots of different lenders (particularly if you do this within a short period of time). This is because an application to a lender will often trigger what’s called a hard credit check. Hard credit checks are a formal credit inquiry and therefore impact your credit score.

If you want to find out what interest rate you can get for your loan simply apply with us and we’ll check for you without impacting your credit score.

Your repayment history.
Whether you have paid on time, had accounts in arrears or defaulted can impact your credit score. This is not just your repayment history of loans. Your repayment history on things like gas, electricity, phone and internet can also impact your credit score.

Your personal details

Credit agencies take into account your personal circumstances such as age, as well as ‘stability factors’ such as how long you’ve been employed in your current position and how long you have lived at your current address.

Defaults, Bankruptcy, debt collection agencies and short-term credit
These can clearly negatively impact your credit score as can open accounts with debt collection agencies and short term credit like pay day lenders.

What is a good credit score?

Credit reporting agencies provide a score between 0 and 1,000 or 0 and 1,200.

Here are some approximate ranges to give you a guide on what is a good score for the key providers:


Excellent: 841 – 1,200
Very Good: 756 – 840
Good: 666 – 755
Average: 506 – 665
Below average: 0 – 505


Excellent: 800 – 1,000
Very Good: 700 – 799
Good: 625 – 699
Fair: 550 – 624
Below average: 0 – 549

How can I find out my credit score?

You have a right to get your credit score for free every 3 months. It’s definitely worth finding out what your credit score is regularly.

Follow these links to find out your credit score (free):

Equifax: Call 138 332 or go to their website.

Experian: Call 1300 783 684 or go to their website.

illion: Call 132 333 or go to their website.  

Can my credit score change?

Yes. Your credit score is a dynamic number that can change depending on the factors we listed above.

How do I improve my credit score?

Great question! We have written an article titled “How to improve your credit score”. We think you’ll find it really helpful.

Does checking my credit score hurt my rating?

No. If you use one of the services above it won’t hurt your score. Importantly, at nmoni we do not do an upfront credit check when assessing your loan application. We do what’s called a soft credit check. Soft credit checks are not a credit application. This means they do not come up as a credit inquiry and therefore do not hurt your credit score. So if you need a loan it’s best to use our free service to find a great rate from our panel of over 20 lenders and avoid hurting your credit score.

If you’d like us to find you a personal or car loan from our panel of over 20 lenders fill in our application form now. It only takes 10 minutes!

Frequently Asked Questions

A credit score is a number generated by credit reporting agencies that provides an indication of your credit worthiness. A credit score is really important as they can significantly affect your ability to get a loan and how much that loan will cost (the interest rate and other chargers).

The exact formula is not disclosed by credit reporting agencies however there are several key factors that they consider like the amount of money you’ve borrowed, the number of loan applications you have made, your repayment history and any defaults, bankruptcies, debt collection agency agreements or short-term credit you have.

Here are 5 ways to improve your credit score: 1. Pay your bills on time, 2. Don’t apply for a loan at multiple lenders, 3. Pay your loans off on time, 4. Check your credit score is accurate, 5. Reduce the amount of credit cards.

The higher your credit score the better your chance of getting a loan and the better chance you have of getting a lower interest rate. This is because if you have a really good credit score you are a lower risk to a lender and therefore are a good chance of paying back the loan. Conversely, if you have a lower credit score a lender may classify you as having higher risk and therefore charge a higher interest rate.

In addition to your credit score, other factors like overall banking conduct (such as dishonours and payday loans) can also impact the interest rate you are offered. 

At nmoni we do not perform upfront credit checks. This means that we can review your application and give you a guide as to whether a lender will give you a loan before a credit check is completed. Our process reduces the number of credit checks required and therefore helps you avoid hurting your credit score. Start the process today by completing our fast application.

At nmoni we review your situation and only apply for loans with lenders we believe will approve your application and provide the right rate. This will reduce the impact on your credit score while also saving you a lot of time and hassle.

This is really important as you don’t want to get a loan with a lender that charges high fees and has high exit costs. We only deal with reputable lenders so we can ensure you avoid any of these potential potholes. Also, make sure the lender or broker you use has high Google ratings (we happen to have a 4.9 out of 5 Google rating!).

The good news is that there are lenders who work with clients looking for a car loan with bad credit. Importantly, these lenders often change their lending criteria so it’s important to work with a broker who can help place you with a lender who is more likely to fund your dream car purchase. Please complete our online car loan application and we will check our panel of over 20 lenders to see who can help with your situation.

We take a broader view of your application than just your credit score. We do this by reviewing your overall credit profile to get a clearer picture of your financial position. We do this without performing an upfront credit check (we do a soft check that does not impact your credit score). Importantly, we also provide credit feedback if we cannot assist you with a loan right now. 

Secured loans are amongst the easiest loans to get. That's where you put up something of value in exchange for funding. Car, boat and caravan loans are types of secured loans and means the lender has some security over the loan.

We can review your situation and provide feedback on why you are being declined without hurting your credit score. Apply now and we'll provide you valuable feedback.

There are lenders we work with that specialise in clients with lower credit scores. The best way to find out is to complete our online application and we’ll put our technology and/or one of our credit analysts to work to review your file and provide feedback. We can provide valuable information on your options without affecting your credit rating.

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After searching for a car loan I found nmoni. They are very helpful… keep you up to date at the progress of your loan. And made settlement a breeze. Thank you Chris and Michelle you are both amazing.

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Outstanding service. Above and beyond and service you just can’t get from a big bank or finance company.The team at nmoni have been incredibly helpful in assisting me with obtaining business finance for my new vehicle. Every step of the process they have been super responsive and highly efficient. I would highly recommend their service!

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I just want to say thank you to Chris from NMONI for helping me get my car finance.

Highly recommended bunch! As they go above and beyond to help you achieve the best possible outcome. They are very prompt with communicating and provide excellent customer service.

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Omg with my credit rating I thought I’d never get credit again but these guys gave me the chance and now my credit rating is rising these guys work magic

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Nmoni is such a great lending company, Christina is the best of best broker, person and very understanding. Great customer service and very helpful any time, she actually answers the phone unlike other company employers who do not care. She Actually cares and Christina does everything in her power to help and solve your issues. Thank you Nmoni and thank you Christina.

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Disclaimer: The information contained in this article is general in nature and does not take into account your personal objectives, financial situation or needs. Therefore, you should consider whether the information is appropriate to your circumstance before acting on it, and where appropriate, seek professional advice from a finance professional such as an adviser