Credit history in Australia: why new arrivals should build it now
When you arrive in Australia, your credit history from your home country does not follow you. Even if you had a good credit record back home, in Australia you start from a blank page — no bad history, but no good history either.
This affects more things than you might think.
What credit history is
Credit history is a record of how you have borrowed and repaid in the past: which credit products you have had, whether you paid on time, and whether you have ever defaulted or had a bad debt.
This record is collected and managed by credit reporting bodies in Australia. Financial institutions — banks, finance companies, and sometimes landlords and service providers — access this record when they assess an application for a loan, a rental, or a contract.
What a credit score is
Based on your credit history, credit reporting bodies calculate a number called a credit score. This number is a summary indicator of how creditworthy you are — a higher score means lower risk, as assessed by the system.
Each company has its own scale — there is no single credit score. The important thing is not to memorise a specific number, but to understand which behaviours affect it.
When you first arrive in Australia
Having no credit file (“thin file” or “no file”) does not mean you have a low score — but it makes it harder for a financial institution to assess your risk. Some institutions decline an application because there is not enough information; others offer a lower limit or ask for additional conditions.
In practice it affects:
- Renting a home: Many landlords and property managers run a credit check when assessing a rental application — an empty record is not always a problem, but it helps to know in advance.
- Credit cards: Your first card application usually comes with a limited credit limit.
- Phones on a plan: Some phone contracts include a credit check.
- Home loans: This is the type of loan where credit history has the most important effect.
What affects your credit history
Positive effects (building a good record):
- Paying bills and loans on time, consistently
- Keeping credit card use at a reasonable level — not constantly near the limit
- Having long-standing, stable credit accounts
Negative effects (to avoid):
- Late payments, especially 60 days or more overdue
- Defaults
- Submitting too many credit applications in a short time — each application creates an “enquiry” on your record; too many enquiries in a short period can be seen as a sign of risk
How to start building credit history
There are no shortcuts — credit history is built gradually through actual behaviour.
A low-limit credit card: This is the most common tool to start with. Use a small amount each month and pay off the balance in full and on time — do not carry a balance. Over time, this behaviour builds a good credit history without paying unnecessary interest.
Avoid many applications at once: When you first arrive, you may want to sign up for several things at the same time. Each application creates an enquiry — prioritise what you genuinely need.
Bills on time: Electricity, water and phone bills are not automatically reported to your credit file. But if you let them fall so far behind that they go to a debt collector, that can go on your record.
Checking your credit file
You have the right to view your credit file free of charge once a year from each credit reporting body. In Australia, the main bodies include Equifax, Experian, and illion. The moneysmart.gov.au site has guidance on how to request it.
Check your file regularly to spot incorrect or unusual information — and to know where you stand before you need it.