Experian vs Equifax: Which Credit Agency is Better?

Experian and Equifax are two leading credit reporting agencies in Australia. They are responsible for collecting credit information, calculating credit scores, and providing credit reports to lenders to help them assess the creditworthiness of potential borrowers.

But how do the credit scores from Experian and Equifax vary, and how are these scores calculated? Here’s what you need to know about them:

Experian is one of the world's leading credit reporting bodies, operating in Australia since 2013.

As a credit bureau, Experian helps lenders and financial institutions assess the creditworthiness of potential borrowers by providing access to credit scores and reports.

How Experian Calculates Your Credit Score

Experian uses a proprietary formula to calculate the credit score based on your current credit information.

Even though the exact formula used for calculation is not shared publicly, Experian does share the factors that impact your score.

• Payment history - This is usually the most significant factor. Late or missed payments can negatively impact your score.
• Credit utilisation - The ratio of your current debt to your total available credit. Keeping this ratio low is generally beneficial for your score.
• Credit history length - The average age of your accounts and how long you've been using credit products.
• New credit enquiries - Recent credit applications and hard enquiries. Multiple applications in a short period can lower your score and may signal financial stress to lenders. Consider spacing out credit applications and only apply when necessary.
• Credit mix - The variety of credit types in your portfolio, such as credit cards, personal loans, and mortgages. A diverse credit mix can positively impact your score.

Credit scores from Experian range from 0 to 1000, with scores of 625 and above generally considered 'good'. However, each lender has their own assessment criteria.

Equifax is another multinational credit reporting agency and Australia's largest consumer credit bureau.

Equifax collects credit information from financial institutions across Australia and uses this data to calculate your credit score. Lenders access this information through credit reports to help assess loan applications.

How Equifax Calculates Your Credit Score

According to Equifax, these key factors may influence your credit score:

Payment history - Your track record of repaying debts on time. The scoring model considers both the frequency and severity of late payments.

Types of accounts - Whether you have revolving debt (like credit cards) or instalment loans (like mortgages). A balanced mix of both types may contribute to a stronger score.

Credit utilisation - The percentage of your total available credit that you're currently using. While many credit agencies suggest keeping utilisation below 30%, optimal levels can vary based on your individual circumstances.

Credit history length - The duration of your credit history, which demonstrates your ability to manage credit responsibly over time.

Equifax scores range from 0 to 1200, with scores of 670 and above typically considered 'good'. Remember that lender requirements vary depending on the credit product and their specific lending criteria.

When comparing these two credit agencies, several important differences emerge:

Credit Score Calculation and Ranges

One of the key differences is how these credit rating agencies calculate your score.

• Equifax scores range from 0 to 1200
• Experian scores range from 0 to 1000

Their algorithms also differ, which means you may see different scores from each agency even when reviewing the same credit behaviour. This is normal and expected.

Information Collected

Credit providers aren't required to report to all agencies. Some lenders report only to Equifax, while others may report exclusively to Experian or to both.

This means each agency may hold different information about your credit history, which can lead to variations in your scores.

Credit Report Formats

The way credit reports are presented also varies between Equifax vs Experian.

Equifax organises reports into clear sections like revolving accounts and mortgages, classifying accounts as open or closed for easier navigation.

Experian structures reports into three main sections: personal information, accounts, and enquiries. Experian also provides detailed monthly data for each account, including payment history and balance information.

If you've checked both your Experian and Equifax scores, you may have noticed they're different. Here's why:

Different algorithms - Each agency uses its own proprietary scoring method with unique weightings for various factors.

Different scales - Experian's 1000-point scale versus Equifax's 1200-point scale creates a 200-point difference in maximum scores.

Different information - Not all lenders report to both agencies, so each may have access to different parts of your credit history.

Different update timing - Agencies receive and process information at different times, which can create temporary discrepancies in your scores.

As per the information on their websites, the general factors taken into account by Experian and Equifax for calculating the credit score are not identical:

Which credit report is most accurate?

There’s no clear answer to which credit report between Experian vs Equifax in Australia is a better option. As stated above, not every lender reports to both agencies. As a result, the information in the credit report is not the same.

And having different information in different reports is absolutely fine as long as the information has been recorded accurately. You need to review your credit report closely to identify erroneous information, such as incorrect loan details or loan enquiries that were actually never made. Reporting any inaccurate information on time can help you improve your score automatically.

There's no definitive public list of which lenders use only Experian, and these preferences can change over time.

Before applying for credit, you can ask the lender which credit agency they use. This helps you check the relevant score beforehand and understand what the lender will see. Warning: Multiple credit applications can negatively impact your credit score and should be carefully considered.

Note: ClearScore is not a credit reference agency, but we do give you your credit score and report for free using data from Experian. You’ll also get access to key insights that helps you take control of your financial future.

Both Experian and Equifax play important roles in Australia's credit system. Understanding their differences helps you track your credit health more effectively and make better financial decisions.

By monitoring your scores from both agencies, you'll know exactly where you stand when applying for credit products. Regular monitoring also helps you spot and correct errors quickly, supporting better credit scores over time.

With ClearScore, you can access your Experian credit reports and scores for free, for life. Track your progress, spot opportunities to improve, and take control of your financial wellbeing - all in one place.

How does ClearScore help me monitor my credit score?

ClearScore provides free, lifetime access to your credit reports and scores from both Experian and Illion. You can check your scores as often as you like without affecting your credit rating, helping you stay on top of your credit health and spot any errors or unusual activity quickly.

Can ClearScore help improve my credit score?

Yes. ClearScore offers personalised insights and recommendations based on your credit report, helping you understand what factors are affecting your score and what steps you can take to improve it. The platform also shows you credit-building products you may be eligible for, allowing you to make informed decisions about your financial future.

Does checking my score on ClearScore affect my credit rating?

No. Checking your credit score through ClearScore is a soft search, which means it won't impact your credit rating at all. You can check your score as many times as you want without any negative consequences, unlike hard searches that occur when you apply for credit.

How does ClearScore make money if it's free?

ClearScore earns commission by showing you personalised credit offers from its partners, such as credit cards, loans, and other financial products. You're never obligated to apply for anything, and the service remains completely free whether you use these offers or not.

What's the difference between ClearScore and Experian or Equifax?

ClearScore isn't a credit reference agency. Instead, it partners with credit bureaus like Experian and Illion to deliver your credit information in an easy-to-understand format. Think of ClearScore as a free platform that helps you access and understand your credit data, along with tools and insights to improve your financial health.

Disclaimer: Credit scores are calculated by credit reference agencies using their own methods. Your score may vary between agencies. This guide provides general information and should not be considered financial advice. For specific guidance about your situation, consider speaking with a qualified financial adviser.