What Credit Score Do I Need for a Business Loan in Australia?

Credit score is one of the most misunderstood aspects of business lending in Australia. Many business owners either don't know their score, assume it's fine, or assume a less-than-perfect score means they can't get finance. The reality is more nuanced.

Which credit score do Australian business lenders use?

In Australia, the primary credit bureau used for business lending is Equifax (formerly Veda). Lenders typically assess the Equifax 2.0 Comprehensive score, which ranges from 0 to 1,200. A higher score represents lower credit risk.

Some lenders may also reference Illion (formerly Dun & Bradstreet) or Experian scores, particularly for larger facilities or commercial lending.

What is the minimum credit score for a business loan in Australia?

For lenders on the OverdraftMe panel, the minimum Equifax score is generally 550 (2.0 Comprehensive). This applies across both business overdrafts and business loans.

However, score alone doesn't determine approval. Lenders assess your application holistically - a score of 580 combined with strong, consistent revenue and clean bank statements can be more compelling than a score of 650 with erratic cash flow.

What lenders actually look for in your credit history

Beyond the score itself, lenders examine:

• Defaults - any unpaid defaults, especially recent ones, are a significant negative signal
• Dishonoured payments - returned direct debits or cheques on your bank statements
• Court judgements - any CCJs or court-ordered debt payments
• Existing credit enquiries - multiple recent credit applications can indicate financial stress
• Credit utilisation - how much of your existing credit limits you're using
• Payment history - whether you pay existing obligations on time

For new businesses (under 2 years trading), the director's personal credit history carries significant weight, as there isn't enough business history to rely on.

How to check your Equifax score for free

You can check your Equifax score for free at getcreditscore.com.au. This is a soft check - it doesn't appear on your credit file and won't affect your score. You're entitled to one free credit report per year from each bureau under Australian law.

What if my credit score is below 550?

A score below 550 doesn't automatically mean you can't access business finance - but it does narrow your options significantly. Here's what you can do:

• Check your report for errors - credit file errors are more common than you might think. Dispute any incorrect listings directly with Equifax.
• Pay any outstanding defaults - a paid default still appears on your file but is viewed more favourably than an unpaid one
• Allow time - defaults and late payment listings typically remain on your file for 5 years. Time is your friend.
• Build positive history - consistently paying existing obligations on time gradually improves your score
• Consider secured options - if you own property, a secured facility can sometimes be accessed with a lower credit score because the lender's risk is mitigated