Here’s the highest credit score possible
(and how to achieve it)

On a scale of one to a thousand, are you a human or a unicorn?

You may not know it, but that’s essentially the question everyone asks when they seek out their credit score. At Credit Simple, your credit score runs between 0 and 1,000 – the higher the score, the lower the likelihood of you incurring a black mark against your name in the next 12 months.

Anything under 500 is generally viewed as a poor credit score, and may significantly impact your ability to get any form of credit. This accounts for around 15-20 per cent of Australians, with the average score somewhere around 750.

At the very top of the scale, you’ll find the unicorns.

What is a perfect credit score?

Around four per cent of Australians have a credit score of 1,000. These are the unicorns (or prime customers), the supposedly magical creatures who have a credit record the rest of the population would envy. Their applications for credit are almost always approved, as these people have demonstrated a strong ability to repay debt on time and in full.

But four per cent is no small figure. Quite a few people have managed to get their credit score here and above, which suggests it’s not as hard as you think.

Who are these credit unicorns?

Typically, people with the highest credit scores are older Australians – those who have had time to pay off significant debts in a satisfactory manner. Scores tend to improve over time as people pay off more and more of their debt, so this higher age for unicorns should come as no surprise.

They would usually have an active mortgage account, or have recently finished paying off a mortgage. They will also have paid all of their bills on time for the last two years (which is as far back as comprehensive credit reporting goes).

This may sound familiar – you could be in a similar position, but find your credit score still sits well below the 1,000 mark. That’s because building a fantastic credit score is more than just paying your bills – it’s being selective with where you source your credit.

How to build a good credit score

1) Take your time

Often, the simplest way to improve your credit score is to be patient. Records will show your credit history for the past five years (or two for bills), so to improve your score due to a four-year-old default you may simply have to keep making payments on existing debt and wait 12 months until it comes off your record.

2) Manage your applications

Multiple credit applications or too many debts in a short space of time can be a red flag for lenders. This suggests a borrower is not reliable, and is somewhat desperate to secure debt in order to pay for something short-term – not a sign of a reliable credit user.

Ideally, a consumer shouldn’t have more than three or four lines of credit at once, and shouldn’t have a history of numerous applications, whether rejected or approved. Only applying for credit you need is key. This includes telco products and power accounts as well as mortgages, credit cards and personal lending – those with the best credit scores usually only have a handful of applications in the past few years.

3) Think about what your borrowing means

As alluded to above, lenders don’t just look at a credit application on its own – they look at what it can imply. For example, applications for small value loans (under $2,000) are often with payday lenders or similar bodies. Other lenders can look at this kind of credit and, regardless of your reason for applying for it, read it as an implication that you are not a stable borrower.

In many cases, you could be better off with a credit card for short-term spending. However, this comes with its own risk – especially if you’re a man.

A great credit score is a gradual process

The tangible steps to a high credit score are simple: Only apply for credit that you need, and repay all of your debts on time over a long period. However, it’s easy to let one missed payment or overdue bill impact your entire history, forcing you to build up good behaviour over five years until that mark is removed from your report.

Nobody becomes a unicorn overnight – it takes years of consistency. If you want to find out more about where your credit score is currently at, there’s plenty of info right here on our blog.