Illion formerly known as Dun & Bradstreet is one of the three major credit rating bureaus (CRBs) operating in Australia.
Lets’ dive in to find out ‘how does your Illion credit score affects your home loan application?’.
Which lenders use Illion credit score?
Almost all lenders use Illion, but mostly in the commercial/institutional lending space and for businesses to assess other businesses where they may be setting up credit terms.
Equifax (previously Veda) is more widely used by Australian banks and specialist lenders alike when assessing a borrower’s credit-worthiness for home loans.
However, the Big Four banks tend to work with all three credit reporting bodies in Australia. Since in very rare cases, a consumers’ credit report may have a default listed in their Illion credit report but not in Equifax.
It would be fair to say that most residential lenders use Equifax in Australia and those who use Illion use it in conjunction with Equifax.
How does my Illion credit score affect my home loan application?
Your Illion credit score or any other credit score is just one aspect lenders consider when assessing your home loan application, important yes, but there’s more to it!
Most lenders have an internal credit scoring system that utilises not only your credit score and your credit file but also your:
- Repayment history,
- Year-to-date (YTD) income and living expenses,
- Employment stability,
- As well as information from your home loan application when assessing you as a borrower among others. E.g. even your debt-to-income ratio (DTI ratio) with the new loan is considered among others.
There is an in-depth assessment of your overall financial situation.
They use this process to determine if they will lend to you, how much they will lend, and on what terms?
As an example, when a lender receives your home loan application, their system pre-screens applications with a low credit score and may knock it back because of it.
A good credit score is a good indicator of your credit-worthiness as a borrower and gives you access to a more wider choice of lenders.
However, some lenders do not credit score. These lenders take a more flexible approach and assess each application on its merits.
For example, some non-major banks can consider adverse credit history due to one-off life events such as divorce, death in the family, job loss etc.
Moreover, there are bad credit home loans available via specialist lenders for more severe adverse credit listing such as judgments, bankruptcy etc. albeit at a higher interest rate.
In conclusion, your Illion credit score doesn’t factor into your home loan application as much as one would think.
Does Having an Excellent Credit Score mean better terms on your home loan?
Does having an Excellent credit score really mean better terms on your home loan than say if your credit score was average?
No, at the moment your credit score does not impact the interest rate you pay for a home loan.
Interest rates are currently dictated by loan size, LVR (loan to value ratio), investment or owner-occupied, and principal & interest or interest-only (repayment).
Whilst most lenders have their own credit score system, one of the inputs will be your Equifax score, the higher your Equifax score, the higher your overall credit score, thus improving the chances of a customer getting an approval.
Where do I see my Illion credit score?
All the three credit rating bureaus have a free online service used to retrieve your score (their own get your credit score for free division), namely:
- Equifax is Getcreditscore
- Experian is Creditsavvy
- Illion is Creditsimple
However, please note that there may be minor discrepancies between the credit score you see and the score a lender sees.
How To Get Your Free Illion Credit Score?
Australians can view their Illion credit report and track their credit score for free through their site Credit simple.
To use their services, you’ll need the following information:
- Full name
- Date of birth
- Current and previous addresses
- One form of ID such as a passport or drivers’ license
Why is My Illion Credit Score Different From My Equifax Score?
There are several reasons why your Illion credit score might be different than from other credit reporting bureaus (CRB) even if the underlying credit file remains the same. Primarily, because:
- Each credit reporting bureau differs in their calculation methods and interpretation of data found on your credit file.
- Most financial institutions share your credit behaviour with all the credit bureau;, however, a few financial institutions only share your data with Equifax. This can lead to some discrepancy on your credit file ipso facto a different credit score.
- Each CRB uses a different credit score range to display your credit score, i.e. Equifax’s range is between 0 -1200 whereas Experian’s range is 0 -1000.
- The adoption of comprehensive credit reporting or positive credit reporting.
How Has Comprehensive Credit Reporting Affected My Illion Credit Score?
The implementation of comprehensive credit reporting or positive credit reporting in Australia has provided a fuller picture of a borrowers’ credit history and conduct to lenders.
On average, more people will see their credit score rise than fall.
In a research by Credit Simple (Illion), they found that Australians with positive NAB data on their file saw a median increase of 35 points in their credit score, while the typical decrease was 74 points.
Your Illion credit report now contains more information than ever before; most importantly it contains:
- 24 months repayment history: Previously, unless you had defaulted on a credit facility, your repayment history would not show up on your credit file. For each credit facility, your last 24 months repayment history is reflected.
- The financial institution where the account is held – NAB, Westpac etc.
- The nature of the credit account – Personal loan, home loan, overdraft or credit card.
- The date a credit account is opened and closed.
- Current limit on credit accounts.
What Is A Good Illion Credit Score?
Any Illion credit score between 500 and 699 is considered ‘Average’ and is considered good.
That means by simply avoiding late repayments and limiting the number of credit application, you can improve your score.
What is Illion’ Credit Score Range?
Illion’s credit score range from 0 to 1000 with 0 being the lowest and 800-1000 considered to be ‘Excellent’.
Illion’s credit score range:
- Excellent: 800 -1000
- Very good: 700 – 799
- Average: 500 – 699
- Fair: 300 – 499
- Low: 0 -299
Differences between Equifax, Illion and Experian credit score
These three credit bureaus use their own proprietary algorithm to determine your credit score.
Different credit events or even lack of recent credit activity are weighted differently as such, there can be discrepancies between your Equifax, Illion and Experian credit score.
| Credit Score Range | Equifax Credit Score | Experian Credit Score | Illion Credit Score |
|---|---|---|---|
| Excellent | 833 – 1200 | 800 – 1000 | 800 – 1000 |
| Very good | 726 – 832 | 700 – 799 | 700 – 799 |
| Average | 622 – 725 | 625 – 699 | 500 – 699 |
| Fair | 510 – 621 | 550 – 624 | 300 – 499 |
| Low | 0 – 509 | 0- 549 | 0 – 299 |
Credit score range of Equifax, Experian and Illion
FAQs
Does Illion use comprehensive credit reporting?
Yes, in fact, Illion was the first credit rating bureau to implement comprehensive credit reporting in Australia.
What data are collected by the credit rating bureaus?
Do you have a low Illion credit score? We can help!
Even if you have a low credit score, we are usually able to help you buy a property by either:
- Finding you a lender that can consider your low credit score.
- Helping you ‘prepare to buy’ by assessing your situation in full and recommending actions you can take to qualify in the near future.
Our mortgage brokers regularly work with borrowers who wouldn’t normally qualify for a mortgage; in some cases, our brokers have spent 6-12 months getting them to a point where they qualify for a home loan.
Get started on your home buying journey!
Give us a call on 1300 889 743 or fill in our short no-obligation assessment form.