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How your credit card affects your credit score

Your credit card doesn’t just help you access funds when you need – it also contributes to your credit score which is a number generated by credit reporting bodies and gives an insight into the way you use credit.

Your credit score can also be used by credit providers to assess your credit worthiness when you apply for a consumer credit loan such as a personal loan, home loan or car loan.

  1. What is a credit score?
  2. Why is a good credit score important?
  3. How is your credit score calculated?

What is a credit score?

A credit score is one indicator of your overall credit health and is a number assigned to you by a credit reporting body. It is a summary of what’s on your credit report and an indicator of your credit worthiness. Most credit scores are out of 1000 and the higher the score the better your credit health is.

Credit providers may use their internal scores and/or the credit reporting bodies' scores to determine the credit decision and amount of credit offered to you at the time of your application.

Your credit card may only be part of the credit health equation, but it’s still a good idea to learn how your card affects your overall score

Why is a good credit score important?

When considering whether to lend you money – for a car, a home or something else – banks and other organisations want to know you’re responsible with credit and will be able to pay your loan back on time. For this reason, they may look at your credit report and credit score to help decide whether to approve your loan and how much to lend to you. That’s why it’s important to make sure your credit score is as favorable as possible.

How is your credit score calculated?

When it comes to your credit card, the kind of activity that affects your credit score includes your:

  • repayment behaviour: your ability to make repayments on time and consistently pay your debt down will be reflected in your credit score. You may like to set up an automatic payment to take the hassle out of remembering to pay on time.
  • credit applications and accounts: The number of credit applications, the amount of credit and the number of credit products you hold affect your credit score. Remember to apply for and open new credit accounts only when needed
  • other types of credit: as well as your credit card, your credit score is affected by any other loans you have such as personal loans, car loans and home loans. Being able to demonstrate you manage other debts responsibly could help your credit score.

    Your credit score will change over time depending on your behaviour. So even if you’ve been a little less than diligent with debt in the past, it’s never too late to try and improve your habits… and your score.

    You can request a free credit report once a year from each credit reporting body and check what’s on your file. The credit reporting bodies Westpac Group reports to are Equifax, illion and Experian. Visit for more information and to request your free report.

Things you should know

Credit criteria, fees and charges apply. Offers are not available in conjunction with any special offers that are not listed on Switches, upgrades or customers accessing employee benefits are ineligible. Offers may be withdrawn or extended at any time. This information does not take into account your personal circumstances and is general in nature. It is intended as an overview only and it should not be considered a comprehensive statement on any matter or relied upon as such


© 2016 Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian credit licence 233714. The Westpac Group, 275 Kent Street, Sydney, NSW 2000, AUSTRALIA.