The VedaScore is a number up to 1200 that summarises an individual's credit record. The national average VedaScore is 757 and a score of 200 means the person has a 50 per cent chance of having an "adverse credit event" within the next 12 months. Izzy Silva, Veda spokesperson, says 23 per cent of consumers have now accessed their VedaScores, up from 11 per cent in 2015, which shows people are taking action to better understand their credit situation. He says, however, 17 per cent of Australians are at risk of default in the next 12 months or 2.86 million people.

"Millennials have an average VedaScore of 712, which is the lowest average VedaScore of any age group in Australia, and the only generational VedaScore lower than the national average," Silva says. Millennials are those born in the 1980s and 90s. The Finder survey finds two out of three respondents rated a score of 500 as "average". "Even more worryingly, almost one-in-five thought 500 was 'above average' or 'excellent', when in actual fact it's quite the opposite," says Bessie Hassan, the money expert at Finder.com.au. ​ It's likely that many people only access their scores when they are knocked back for credit.

Early warning of a poor credit score leaves more time to take action to improve scores, Hassan says. "Younger people can easily get caught out by not paying off their bills on time or turning a blind eye to their credit score until the need arises. "It is often not until they make a big financial decision such as buying a property and applying for a mortgage or getting a car loan when they are faced with unexpected rejections," she says. Izzy Silva says high credit awareness can have a real impact on a consumer's financial behaviour. "When an individual understands that a missed phone or credit card bill could hurt their chances of being approved for a loan down the track, they are more likely to be financially responsible," Silva says.

Credit agencies have been collecting more information since the new credit reporting regime started in March 2014. Before the change, credit reports, which credit agencies provide to lenders when they check on applicants, held negative information only, such as missed payments of more than 60 days and bankruptcies. Under the comprehensive reporting regime, monthly payment histories on loans and credit cards are shown and reports flag any missed payments of more than 14 days. Other results from the survey show that one in three believe a pay rise will improve their credit score, but it doesn't. And one in four thought they could be penalised for checking their credit score too often, when the truth is that checking your credit score won't affect it.

One in four could not answer correctly whether applying for several loans or credit cards in a short space of time would negatively affect their credit score – it can. "Multiple applications can be a bit of red flag to credit providers and you should do your homework before proceeding with an application for any sort of credit," Hassan says. The credit agencies lobbied for comprehensive reporting in Australia, saying the inclusion of repayment history on credit reports, for example, would help people with poor credit histories to show lenders they had changed their ways. Consumers are entitled to obtain a free copy of their credit reports at least once a year from credit agencies.