Nearly 3 million Australians are at risk of credit default – which could see their all-important credit score fall – in the next 12 months, according to new figures.
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A default occurs when, for example, you haven't paid a mobile phone bill of $150 that is 60 days overdue. A low score could stop you from getting a credit card or a mortgage.
The average credit score this year is 757, down 14 points on last year's figure but still considered "very good", according to the largest credit bureau Veda. Scores can range from zero to 1200.
The highest average score was in NSW's Sutherland region, while the lowest was in Queensland's Logan-Beaudesert region, south of Brisbane.
"If you don't know what your score is, you're already starting on the back foot. Know where you stand," said Izzy Silva, a general manager at Veda.
"You have the opportunity to say to your lender, 'I'm not your standard or your ordinary, I'm a good, creditworthy individual, I deserve a better rate'."
About 2.86 million people, which is 17 per cent of credit active Australians, are at risk of credit default in the next 12 months, according to Veda's new report based on 1000 respondents and an analysis of 2 million "VedaScores".
The percentage at risk is as high as 20 per cent in Queensland and 22 per cent in the Northern Territory, compared to 14 per cent in the ACT.
In terms of age groups, 23 per cent of millennials are considered at risk, compared to 5 per cent of the silent generation – those born between 1925 and 1945.
As expected, older Australians have higher credit scores, as they have longer credit histories, often have more secured credit, such as mortgages for their home or investment properties, and are more likely to pay bills on time.
But reassuringly, millennials are more likely to be concerned about their credit history - indicating many young people are beginning to worry about the long-term impact of their spending habits.
"Consumers are becoming better informed about the role their credit history plays," said Mr Silva.
"Twenty-three per cent of people have now accessed their credit score, compared to just 11 per cent in 2015. This number climbs to 26 per cent of people under 30, suggesting millennials are more credit-aware than the average Aussie."
Australians can find out their score by visiting getcreditscore.com.au and can legally access a copy of their credit report for free each year. They should make sure the information in the report is correct.
New data shows two-thirds of Australians have a credit score between 622 and 1200, which can be described as "good", "very good" or "excellent".
Worryingly, 17 per cent have a score between 0 and 509, a range labelled "below average", and 16 per cent have a score between 510 and 621, considered "average".
A recent survey by comparison website Finder.com.au found while most people don't expect a lender to reject their loan application, that has been the reality for 9 per cent of Australians.
Its spokeswoman Bessie Hassan said some Australians had been saving for years for a home deposit only to be rejected on the mortgage application because of a bad credit rating.
"It can really be a nightmare if you put it all on the line to buy your first home, and bad money habits from the past come back to haunt you," she said.
"The only lenders willing to take you on will be those that deal with high-risk borrowers in return for high interest."
A credit score reflects a person's credit worthiness, based on factors such as the amounts borrowed, defaults and court orders.
A score can be increased by updating your contact details, making the minimum payment on time, and only applying for credit when needed.
An "excellent" VedaScore is ranked from 833 to 1200, "very good" is 726 to 832, "good" is 622 to 725, "average" is 510 to 621 and "below average" is 509 or less.
