I am Good according to Equifax and Very Good according to Experian.
I don't currently have any credit.
No credit cards, no postpaid phone, no utility bill accounts.
I've received conflicting advice if this is bad or good or neutral for my score.
Will my score improve to Excellent by itself without any credit?
Would opening a credit card and not using it improve my score?
And would having that credit card make it harder to get other credit like a loan?
Yeah. I am kind of curious about this as well… been stuck on 880 out of 1000 and it never changes. I only have one credit card and all my bills are on direct debit. Own my house, no loans and plenty of savings… While my friend is on 920, has what I think is about 40 credit cards, car loans, house loans, rarely ever pays a bill on time (but never goes into any default/late fine), and his credit score is way better than mine.
Unlike the American FICO score, credit scores are a made up concept in Australia. Companies like Equifax and Experian decide what the formula is and change it however they want, with the goal of advertising you credit/loan products they cop a commission for. So don't worry about that 880 at all.
They may have assessed your mate with the credit cards as more susceptible or something so they give him a high score?
As far as I know, when you apply for credit your actual credit report during a credit check does not contain a score at all. (Though happy to be corrected - haven't applied for credit in a few years.)
Correct. Your report does not show your score. (Sorry their made up number)
Correct. I worked in the banking sector and its all BS. Credit scores are a marketing ploy. Not only because they're meaningless and inconsistent, but also because Equifax etc will bend over backwards and change it for you as soon as companies like Credit Repair Australia get involved and start hassling them on a technicality. The entire system is unregulated and just waiting to fall apart.
Credit checks are what really matters. All a lender wants to know is how many loans etc you've had in the past and whether you've paid them on time.
Why do you care? If you aren't in debt or looking to borrow what difference does it make?
I am thinking I might need a loan in the future.
If you have an income and no debt then banks will be falling over themselves to give you credit
How is your Equifax credit score calculated?
https://www.getcreditscore.com.au/articles/credit-score-info…
If you don't have a credit card or mortgage then you might not have a repayment history. 30% of the score.
I wouldn't worry too much. The score is a preliminary measure of whether a bank should even consider lending money to you. Bad score? No go. Good score? Now they look at things that actually matter. How much credit do you have? What's your income? Monthly expenditure? Assets?
In other words, don't worry about your score.
Would having that credit card make it harder to get other credit like a loan?
Yes, as banks take in to account how much credit you have so depending on things like the credit limit on your credit card and the amount you’re trying to borrow it may make it harder.
Score means nothing. Even the credit score companies have a disclaimer telling you as such.
Individual lenders have their own criteria and the provided score by these companies means zero when it comes to lending.
These services exist simply to allow them to sell you loans/credit cards etc and make a commission.
The score they give you is a useless number and means nothing plain and simple
I wouldn't worry about it now. Worry about it if you have an issue when getting a loan.
For my mortgages, they were interested in my assets, income and any debts I had.
And having a credit card would have worked against me.
The score is not the only thing that matters - savings, income, liabilities and expenditure are more important (in my humble opinion). Don’t get a credit card.