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What is bad credit and how does it affect me? | Whiteboard Wednesday

Bad Credit

Whiteboard Wednesday with Walshy

Walshy is back to answer your questions on bad credit in this week’s episode:

  • What is bad credit?

  • How do I know if I have bad credit?

  • How does my credit score affect me?

  • Where can I find out my credit score?


Hi I’m Paul Walshe, the founder and CEO of Fair Go Finance.

Welcome to another episode of Whiteboard Wednesday.  So today’s topic is credit grades in Australia and their impact on you.

What is bad credit?

So different credit grades in Australia exist and lenders will put people into one of three broad categories: good credit, ok credit and bad credit.

How does my credit score affect me?

So the impact of being in a particular category is that it will influence your access to, and the price you pay for, credit.  So if you’re in a good credit category, which is typically someone with a high credit score, then you’re likely to have a lower chance of default and a lender will provide you with a larger amount of capital and at a lower price.

Whereas if you’re in a bad credit category, then typically you’re on a lower score, you’re deemed a higher risk and hence the amount of capital, or amount you can borrow, plus the cost you pay for that capital is a higher cost.

So your credit grade will impact you by limiting your access or determining your access to personal loans.

How do I know if I have bad credit?

So what you can do about this is to basically find out what category you’re in, is driven by your score and a couple of places to go get your score are and So you can subscribe to those services, you’ll get your score, or alternatively go to the bureaus Equifax, Experian or Dun and Bradstreet and they’ll provide you with access to your file and can do it for free.

So hopefully you found that informative, you can understand you can get your score, understand the category you sit in and the impact it may have on you and perhaps explain some frustrations you’ve had in accessing credit in the past.