Your cheatsheet to understand credit scores and credit cards

Credit scores are a bit like rhinos. You know they exist, you know you don’t want to get a bad one but you don’t really know everything about them. That’ll soon change with our handy credit cheat sheet. Below are the most asked questions to help you navigate the world of credit scores and credit cards. 

What are credit scores?

Your credit score is usually a number between 0-1200 which lenders use alongside their own risk criteria as a way to decide if you’re eligible for credit or a loan. The higher the number, the more likely your credit request will be approved. Essentially it’s a summary of your financial information in your credit report.

What is a credit report?

A credit report contains information about your past or current debts or loans and any repayment history that might be associated with them. If you have missed repayments, defaulted on loans or declared bankruptcy, this will also be part of the credit report. If you’re a business owner, any loans or debts that your business carries will also be included.

What else is in a credit report?

Identification information like your name, address, date of birth and if you’re employed, your employers details will be there as well.

How are credit scores calculated?

This is usually calculated by a credit agency and they’ll look at a few criteria:

• Your repayment history for any loans or credit cards

• If you’ve been able to pay bills on time

• If you have any current credit limits

• A summary of how much you have previously borrowed

• If you have defaulted on repayments, declared bankruptcy or have any court judgements

• The number and frequency of credit applications you have made

Why are credit scores so important?

Credit scores show your creditworthiness, how much debt you have and if you are likely to repay any future loans or credit. Lenders use this to determine whether or not they’d like to lend to you, the interest rate and the amount you’re eligible for.

How do credit cards affect my credit score?

When you apply for a credit card, lenders will usually investigate your credit scores. Previous irresponsible use of credit cards such as late repayments or defaulting on repayments can affect your ability to get a new credit card.

Can rewards points help my credit score?

Not directly. Points are handy bonuses that can help your dollar go further with free or discounted flights, travel experiences, consumer goods and heaps more. 

How can I improve my credit score?

First, check if all the information in your credit report is accurate. If it is not, you can ask the credit agency to remove any errors. Other ways to improve your credit score include:

• Paying your bills on time

• Paying your mortgage or rent on time

• Limiting your applications for loans or credit cards

• Not missing your credit card repayments

If you are confident you can make the repayments, a credit card may help you boost your credit score as it can show that you can manage your money.

Ready to apply for a credit card?

Congratulations on staying on top of your finances! When deciding on a credit card, a rewards credit card will help stretch your dollar even further. As you spend, you’ll accumulate points that you can exchange for a variety of products and services. For example, a Qantas Points-earning credit card allows you to use points to pay for gadgets, appliances, flights, hotels, clothing and more. Make sure you stay on track with your finances because when your credit score is in a good place, you will be too.

Compare the wide range of Qantas Points earning credit cards: Try our credit card comparison and selector tool.