Credit repair is the process of cleaning up and correcting incorrect information on your credit report with the goal of improving your credit score.
You have two choices when it comes to trying to repair your credit - you can do it yourself for free or you can pay a specialist credit repair company to do it for you. Both have their benefits and drawbacks.
The advantage of doing it yourself is that it won't cost you anything, but means you may need to devote some time and energy to what can be a confusing process.
The advantage of using a credit repair company is that they'll handle the work for you, but you'll need to pay for the privilege.
Having poor credit history can have a significant impact on your finances and your chance of being approved for loans or credit in future.
Any incorrect listings on your credit report may have an adverse effect on any credit applications you make and cost you a better deal. These listings can be removed via credit repair.
If you have bad credit or have filed for bankruptcy, there could be some things you can do to improve your credit score without having to rely on a credit repair service.
Will credit repair help me?
There's only so much that can be done to repair your credit, whether you choose to do it yourself or use a credit repair company.
Every legitimate listing on your credit file (whether it's a positive or negative listing) will stay there for a set amount of time.
This includes things that can hurt your credit score like missed payments, unsuccessful loan applications, bankruptcies and defaults.
The only thing that you or a credit repair company can get removed from your credit report are incorrect listings made by either the credit reporting agency or a credit provider.
How to repair your credit score for free
If you find incorrect listings on your credit report, you can apply to have them removed for free.
Wait for the credit bureau to correct or remove the listing. This may take up to 30 days.
If they refuse and you're sure that the listing is incorrect, you can contact an ombudsman external dispute resolution service to help resolve your case.
You can also contact a free and confidential financial counselling service or call the National Debt Helpline on 1800 007 007 for assistance.
How else can I fix my credit score?
The best way to improve a bad credit score in Australia is by demonstrating that you're a responsible borrower over an extended period of time. This includes taking the following actions:
Pay off your bills and repayments on time. Late payments and defaults can hurt your credit score, so it's important to make the minimum payments on time each statement period. If you're using a credit card, it's ideal to pay your balance as much as you can or in full each month to reduce your interest payments.
Consolidate your debts. If your credit score is low because you're struggling to pay off multiple card or loan debts because of interest costs, you can consolidate your debts into one account with a 0% balance transfer offer. These cards don't charge any interest on the transferred amount for a promotional period (which can sometimes be as long as 26 months). You can start comparing balance transfer cards and understand how they work on Finder.
Lower your credit limit. Your credit score is also based on how much available credit you have. If you have a large credit limit that you aren't using, you could consider lowering it. Not only will this curb any temptation to overspend, but it could have a positive impact on your credit score.
Don't apply for too many loans at once. Applying for multiple credit cards or loans in a short space of time can hurt your credit score, especially if your applications are rejected.
What is a credit repair service?
If you'd like help fixing your credit file, you can use a credit repair company. Credit repair services look for incorrect listings on your report that may be damaging your credit score and organise for them to be removed for a fee.
The specific fees will differ between credit repair agencies, but you are likely to pay between $500 and $1,500 dollars in total to have a listing removed from your file. You normally pay a fee for every listing you want removed.
This is an example of the process when using a credit repair company:
Initial consultation. You may be offered an initial consultation to explain the credit repair process. This should be complimentary and it's to ascertain whether the process will meet your needs.
Check your credit file. Following this your credit file is checked and the first fee is charged. This stage is to see if there are incorrect listings that can be removed and if there are actionable things that can be done to improve your score.
Formally apply for credit repair. If you want to move forward you will need to formally apply for credit repair. You'll need to list the defaults or incorrect listings you want investigated and removed and you will need to pay a fee for each.
Contacting creditors. The credit repair company, if it accepts your application, will then contact creditors to determine which defaults can be removed from your file. Some credit repair companies may negotiate a payment plan with your creditors if you still have an amount owing.
Listings are removed. If successful, listings are removed from your file. You will pay a fee for each successfully removed listing.
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While many credit repair services are legitimate businesses, it's worth doing your research before you approach one. You should only consider using a licensed credit repair company that is listed on ASIC's website.
It's also impossible to wipe or reset your credit score, so beware any service that claims to be able to do so.
How much do credit repair services cost?
You could expect to pay more than $1,000 when using a credit repair service, but this will vary between providers and may depend on the listings that need to be removed.
Generally, you will need to pay an initial consultation fee which can cost up to a few hundred dollars. There will then be a fee charged for each listing the company successful removes. This varies as well but is also a couple of hundred dollars. According to ASIC, some listings can cost as much as $1,000-$1,500 to repair your score.
Make sure you get a full list of the fees and charges before you agree to pay for the initial consultation.
What impacts the cost of credit repair?
If you decide to get assistance from a credit repair company, the following factors will impact how much you'll pay:
Defaults. The number of defaults you have on your credit file affect how much you have to spend. This is because credit repair companies in Australia charge a fee for each mark they remove. So, the higher the number of defaults, the higher the cost.
Successful negotiations. After each successful negotiation that the credit repair company carries out to remove a negative listing, you'll be charged a fee to ensure the mark is successfully removed.
Crossed or linked credit files. In case you're the victim of crossed or linked credit files because of how certain lenders submit credit data, you can expect a credit repair company to address this for a fee.
What are the benefits of working with a credit repair company?
If you have legitimate incorrect listings on your credit file, here are some of the potential benefits of seeking the help of a credit repair company:
Professional service. Credit repair companies work to repair credit reports for a living, so they know what to look for and who to get in touch with to remove incorrect, negative marks. This could prove more convenient and successful for you compared to if you were to repair it yourself.
Improved credit. The ultimate goal of using a credit repair agency is to improve your credit history and score. This will help increase your chances of approval when applying for loans or lines of credit in the future.
While the costs will vary between different cardholders, credit repair does come at a cost. However, if you decide to get your credit repaired professionally, the benefits it will have on your finances will outweigh the fees in the long run.
You can watch the video below with Merrilyn Mansfield, financial advocate from Princeville Credit Advocates, to find out more about the credit repair process.
VIDEO: The credit repair process
Are credit repair companies worth it?
As we've already mentioned, credit repair companies can't do anything for your credit score or report that you can't do yourself.
If you're wanting to use a credit repair company, you're really just paying for the convenience of having someone else checking your credit report for errors and applying to have them removed.
If you think this is fair value for the fee charged by credit repair companies (which can be upwards of $1,000) then you might want to consider using one. If not, it's probably worth trying to repair your credit yourself.
How to compare credit repair agencies
There are a few credit repair agencies that offer their services to Australian consumers. However, in order to determine whether or not an agency is reputable, there are a few important factors you need to consider:
Licences. Check if the credit repair service has an ABN, which you should be able to find at the bottom of the company's website.
Transparency. How upfront is each company about the fees you will have to pay? Look for a company that provides the full terms and conditions before you have to hand over any money.
Reputation. Is the company a trusted name in the industry or does it have a reputation for being a bit dodgy? Look for a company that is respected and has an impeccable service record.
Customer reviews. Look at online review sites to get an idea of the experiences other people have had with agencies. This gives you a good idea of how each company treats its customers.
Overall cost. Look for the best combination of an affordable price and quality service.
The pros and cons of credit repair services
Pros
They can help improve your credit score. Removing negative listings from your report and adopting positive repayment habits will increase your credit score.
Increase chances of credit approval. Lenders use your credit report and score to assess your risk as a borrower. If you remove any incorrect black marks from your credit report and increase your credit score, your chances of approval should also improve when you're applying for a credit card or loan in the future.
Cons
Fees and charges. If you use a credit repair agency, the credit repair process can be expensive. However, the benefits may outweigh the costs if you get your finances back in order.
No guarantees. There are no guarantees the credit repair company will be able to remove your negative listings. If the black marks are legitimate, you'll have to wait until the set period until they're removed from your report.
Frequently asked questions
Yes. These companies know how to work with credit card providers to remove any fraudulent entries from your file.
Credit reporting agencies can disclose information in your file to credit providers, mortgage insurers, trade insurers and agents acting on your behalf.
No. It's only possible to get rid of listings that are incorrect.
Tom Stelzer is a publisher and writer for Finder, covering investing and cryptocurrency.
He previously worked for Finder as a writer in Australia and the UK, covering things like personal finance, loans, investing, insurance as well as small business and business loans.
He has a Master of Media Arts and Production and Bachelor of Communications in Journalism from the University of Technology Sydney. See full bio
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I opened about 3 savings accounts a few months ago. I then deleted/closed the accounts about a week later.
I didn’t think that it would have any consequences, since it was just another way to move my money around. But it has.
And now my credit score has dropped to the very top of a lower tier.
Is it worth investigating how to amend my credit report or should I just wait it out?
Thanks and regards,
Finder
ThomasMay 22, 2024Finder
Hi,
Thanks for your question!
Opening a savings account shouldn’t normally have any impact on your credit score as banks don’t report savings accounts to the credit bureaus that calculate your credit score.
Chances are this may just be a coincidence and it’s actually something else that has impacted your credit score.
Have you applied for any other credit accounts recently like a loan or credit card, or missed a payment on a bill?
However, if any of these savings accounts came with an overdraft or line of credit facility, they may have been listed on your credit report. Opening and closing 3 such accounts in a short period of time could have negatively impacted your credit score.
You should be able to check your credit report to see which, if any, of these accounts has been listed on your credit file.
Hope this helps,
Tom
JennyOctober 2, 2017
My credit score had dropped to 477. I have nothing on my credit report. The only thing is I applied through a mortgage broker for a home loan. Now my credit score has dropped by 177 ! I dont understand this ? Thanks
MariaOctober 3, 2017
Hey Jenny,
Thanks for reaching out to Finder.
I’m sorry to hear about your credit score situation.
You may try to order your free credit report again to review if this is still the case and if it is then it would be best to seek professional or legal opinion on how to go about it.
I hope this helps.
Best,
Maria
Finder
JhezelynAugust 19, 2017Finder
Hi Kevin,
Thanks for your comment.
Credit scores can be negatively impacted by multiple enquiries from potential financiers. Any credit enquiries will be listed and held on your file for 5 years and payment history information will be held for 2 years. If you’re interested, please read more about credit enquiries. On the same page, you’ll read as well how to remove credit enquiries from your credit file.
Hope this helps.
Regards,
Jhezelyn
MegJune 24, 2017
Hi,
I have a credit default on my account from 2014 which is stopping me from getting credit. It was a small amount-think $300 or less and the debt has been paid and the account closed years ago. I earn approximately $100,000 and have some other debts I would like to balance transfer to a 0% card to pay off quicker but my credit rating is buggered. I want to buy a house in the coming 12 months and the black mark won’t expire until 2019. Is it worth paying the approx $2,000 I have been quoted to have the black mark removed? I know it is not a mistake, I missed the payment. Is there another way for the credit repair company to fix my credit or is it a waste of time?
JonathanJune 24, 2017
Hi Meg!
We know dealing with previous bad credit can really be stressful. :(
Most credit repairs may not be able to remove a valid negative listing as what’s been outlined in this article. We recommend that you take a thorough background check of the agency you will passing on this task. As for applying a loan, this is where this might be a worthy shot only if you are successful in taking it off from your credit and as a result getting a cheaper repayment. Take note that your options could also be just wait until 2019, get a loan with potential higher rates but have it refinanced in the future, or get a guarantor of that sort.
We recommend you talk to a credit expert or a mortgage specialist to have a personalized review of your situation.
Hope this helps.
Cheers,
Jonathan
LizzieOJanuary 10, 2017
I went bankrupt and 3 years later was discharged. Can I remove this from my file?
Finder
MayJanuary 10, 2017Finder
Hi LizzieO,
Thanks for your question.
Your bankruptcy being removed from your credit file will depend on the following circumstances:
1. Debtors petition bankrupts – if you became bankrupt by presenting your own petition, you’ll be due for discharge three years and one day after filing your petition with the AFSA.
2. Sequestration order bankrupts – if you were made bankrupt by an order of the court, you are due for discharge three years and one day after your complete statement of affairs was accepted by the AFSA.
3. Exceptions for all bankrupts – in some cases, bankruptcy can be extended to five or eight years if your trustee lodges an objection to your discharge.
Please read our bankruptcy guide to learn more how bankruptcy works.
Cheers,
May
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Hello,
I opened about 3 savings accounts a few months ago. I then deleted/closed the accounts about a week later.
I didn’t think that it would have any consequences, since it was just another way to move my money around. But it has.
And now my credit score has dropped to the very top of a lower tier.
Is it worth investigating how to amend my credit report or should I just wait it out?
Thanks and regards,
Hi,
Thanks for your question!
Opening a savings account shouldn’t normally have any impact on your credit score as banks don’t report savings accounts to the credit bureaus that calculate your credit score.
Chances are this may just be a coincidence and it’s actually something else that has impacted your credit score.
Have you applied for any other credit accounts recently like a loan or credit card, or missed a payment on a bill?
However, if any of these savings accounts came with an overdraft or line of credit facility, they may have been listed on your credit report. Opening and closing 3 such accounts in a short period of time could have negatively impacted your credit score.
You should be able to check your credit report to see which, if any, of these accounts has been listed on your credit file.
Hope this helps,
Tom
My credit score had dropped to 477. I have nothing on my credit report. The only thing is I applied through a mortgage broker for a home loan. Now my credit score has dropped by 177 ! I dont understand this ? Thanks
Hey Jenny,
Thanks for reaching out to Finder.
I’m sorry to hear about your credit score situation.
Your credit report should have several details regarding your credit activities. Our guide to comprehensive credit reporting explains that.
You may try to order your free credit report again to review if this is still the case and if it is then it would be best to seek professional or legal opinion on how to go about it.
I hope this helps.
Best,
Maria
Hi Kevin,
Thanks for your comment.
Credit scores can be negatively impacted by multiple enquiries from potential financiers. Any credit enquiries will be listed and held on your file for 5 years and payment history information will be held for 2 years. If you’re interested, please read more about credit enquiries. On the same page, you’ll read as well how to remove credit enquiries from your credit file.
Hope this helps.
Regards,
Jhezelyn
Hi,
I have a credit default on my account from 2014 which is stopping me from getting credit. It was a small amount-think $300 or less and the debt has been paid and the account closed years ago. I earn approximately $100,000 and have some other debts I would like to balance transfer to a 0% card to pay off quicker but my credit rating is buggered. I want to buy a house in the coming 12 months and the black mark won’t expire until 2019. Is it worth paying the approx $2,000 I have been quoted to have the black mark removed? I know it is not a mistake, I missed the payment. Is there another way for the credit repair company to fix my credit or is it a waste of time?
Hi Meg!
We know dealing with previous bad credit can really be stressful. :(
Most credit repairs may not be able to remove a valid negative listing as what’s been outlined in this article. We recommend that you take a thorough background check of the agency you will passing on this task. As for applying a loan, this is where this might be a worthy shot only if you are successful in taking it off from your credit and as a result getting a cheaper repayment. Take note that your options could also be just wait until 2019, get a loan with potential higher rates but have it refinanced in the future, or get a guarantor of that sort.
We recommend you talk to a credit expert or a mortgage specialist to have a personalized review of your situation.
Hope this helps.
Cheers,
Jonathan
I went bankrupt and 3 years later was discharged. Can I remove this from my file?
Hi LizzieO,
Thanks for your question.
Your bankruptcy being removed from your credit file will depend on the following circumstances:
1. Debtors petition bankrupts – if you became bankrupt by presenting your own petition, you’ll be due for discharge three years and one day after filing your petition with the AFSA.
2. Sequestration order bankrupts – if you were made bankrupt by an order of the court, you are due for discharge three years and one day after your complete statement of affairs was accepted by the AFSA.
3. Exceptions for all bankrupts – in some cases, bankruptcy can be extended to five or eight years if your trustee lodges an objection to your discharge.
Please read our bankruptcy guide to learn more how bankruptcy works.
Cheers,
May