Credit Reference Agency

A credit reference agency, also known as a credit reporting agency or credit bureau, is an organisation that collects, stores, and analyses credit information about individuals and businesses. These agencies compile credit reports and provide credit scores, which help lenders and other financial institutions assess the creditworthiness of potential borrowers. In Australia, the primary credit reference agencies include Equifax, Experian, and illion.

Key functions of credit reference agencies

Collecting credit information

Credit reference agencies gather information from various sources, including banks, credit card companies, utility providers, and other lenders. This information includes details about credit accounts, payment history, defaults, bankruptcies, and public records.

Creating credit reports

Using the collected data, credit reference agencies compile credit reports. These reports provide a comprehensive overview of an individual’s or business’s credit history and financial behaviour. A credit report typically includes:

  • Personal information (name, address, date of birth)
  • Credit accounts (credit cards, loans, mortgages)
  • Payment history (on-time and late payments)
  • Defaults and bankruptcies
  • Credit inquiries (applications for new credit)
  • Public records (court judgements, insolvency proceedings)

Generating credit scores

Credit reference agencies use complex algorithms to analyse credit report data and calculate credit scores. In Australia, credit scores typically range from 0 to 1,200, with higher scores indicating better creditworthiness. Credit scores help lenders quickly assess the risk associated with lending money or extending credit.

Providing credit information to lenders

Credit reference agencies provide credit reports and scores to lenders, financial institutions, landlords, and employers. This information helps these entities make informed decisions about extending credit, offering loans, or approving rental applications.

Importance of credit reference agencies

Risk assessment for lenders

Credit reference agencies play a crucial role in helping lenders assess the credit risk of potential borrowers. By providing detailed credit reports and scores, these agencies enable lenders to make informed decisions about extending credit and setting appropriate interest rates.

Enhancing financial inclusion

Credit reference agencies help promote financial inclusion by providing lenders with the information needed to offer credit to a broader range of borrowers. Individuals with strong credit histories are more likely to access loans and credit products, while those with less established credit histories can work towards improving their credit scores.

Encouraging responsible borrowing and lending

By maintaining accurate and up-to-date credit information, credit reference agencies encourage responsible borrowing and lending practices. Borrowers are incentivised to make timely payments and manage their credit responsibly, while lenders are better equipped to assess credit risk and avoid over-lending.

Supporting regulatory compliance

Credit reference agencies help financial institutions comply with regulatory requirements related to credit reporting and lending practices. By providing accurate credit information, these agencies support the implementation of responsible lending guidelines and consumer protection laws.

How credit reference agencies collect and use data

Data sources

Credit reference agencies collect data from various sources, including:

  • Banks and credit unions
  • Credit card companies
  • Utility providers
  • Telecommunications companies
  • Government agencies
  • Public records databases

Data accuracy and updates

Credit reference agencies strive to maintain accurate and up-to-date information. Lenders and other data providers regularly report account information, payment history, and other relevant details to the credit reference agencies. In turn, the agencies update credit reports to reflect the most recent data.

Data privacy and security

Credit reference agencies are subject to strict data privacy and security regulations to protect individuals’ personal information. In Australia, the handling of credit information is governed by the Privacy Act 1988 and the Australian Privacy Principles (APPs). Credit reference agencies must ensure that data is collected, stored, and used in compliance with these regulations.

Managing your credit information

Accessing your credit report

In Australia, individuals are entitled to obtain a free copy of their credit report once a year from each of the major credit reference agencies (Equifax, Experian, and illion). Reviewing your credit report regularly helps ensure that the information is accurate and up-to-date.

Disputing inaccuracies

If you find inaccuracies in your credit report, you can dispute them with the relevant credit reference agency. The agency is required to investigate and correct any errors within a reasonable timeframe. Ensuring that your credit report is accurate can help improve your credit score and overall creditworthiness.

Improving your credit score

Taking proactive steps to improve your credit score can enhance your creditworthiness and increase your chances of obtaining favourable loan terms. Some strategies for improving your credit score include:

  • Making timely payments on all credit accounts
  • Reducing outstanding debt and keeping credit utilisation low
  • Avoiding multiple new credit applications within a short period
  • Diversifying your credit accounts and managing them responsibly
  • Regularly monitoring your credit report for accuracy

Example of the role of a credit reference agency

Consider an individual in Brisbane who wants to apply for a personal loan. The lender requests a credit report and score from a credit reference agency to assess the applicant’s creditworthiness. The credit report reveals a strong payment history, low credit utilisation, and a diverse mix of credit accounts, resulting in a high credit score. Based on this information, the lender approves the loan application with a competitive interest rate.


Credit reference agencies play a vital role in the financial ecosystem by providing accurate and comprehensive credit information to lenders, financial institutions, and other entities. They help assess credit risk, promote responsible borrowing and lending, and support financial inclusion. By understanding how credit reference agencies operate and managing your credit information proactively, you can improve your creditworthiness and access better financial opportunities. For more information on credit reference agencies and credit management, you can visit the Australian Securities and Investments Commission (ASIC) website.

DISCLAIMER: The information provided on this page is for general informational and educational purposes only and is never intended as financial advice. While we strive to ensure that the content is accurate and up-to-date, it may not reflect the most current legal or financial developments. Always consult with a qualified financial advisor or professional before making any financial decisions. Use the information at your own risk.


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