There are a number of things you can do to improve your credit score quickly, and other things you can do to improve it over a longer period of time. Before you get started: you need to check your credit score to see what your baseline is.
You can check your credit score for free through Finder. It takes a couple of minutes and then you'll know exactly what your score is. You'll get a score between 0 and 1,000. The higher the better.
Along with the score you'll get your credit report, which contains:
Once you have your credit score you can identify the best ways to increase it.
Look at the details contained in your credit report. If it all looks accurate, then jump to step 3. But if you find any errors you can get them corrected and your credit score should increase pretty quickly.
Here are some examples of possible errors:
You can request a correction on your credit report through the agency that issued the report. And you can contact the credit provider that made the mistake directly.
You'll need some personal identification, plus the report, the specific detail you're challenging and evidence of the error.
Fix the biggest issues dragging your credit score down as soon as possible. Red marks on your credit report are usually:
Prioritise paying off any outstanding debts, especially a default. Make sure you pay any missed payments before the 14 days if possible. Paying off an outstanding payment looks better on your credit report but the missed payment or default is still recorded.
It sounds obvious, but don't miss a payment on your credit card or loan. Pay off at least the minimum on your credit card before it's due.
🔥 Hot tip
Set up direct debits so payments are made automatically. Just make sure you have money in the bank account to cover the payment.
If you have a credit card you hardly ever use, a personal loan nearly paid off or any other debts you can pay out and close, doing so will instantly give your credit profile a boost.
This is because when you cancel a credit card, you're reducing the amount of overall debt you have access to. This is seen as a positive and may improve your credit score.
If you already have a credit card and you're making repayments on time, you can further improve your credit score by lowering the card limit. That's the maximum amount you can spend using the card.
It's much easier to get into financial trouble with a card that lets you spend $10,000 versus one with a limit of $2,000. If you don't need to make big purchases on your credit card, lower your limit and your credit score should increase by the following month.
Your credit record collects both positive data (all the years you've spent paying your phone, internet, electricity and gas bills on time) and negative data (late payments, defaults). When you pay your bills on time, you're building a positive credit score over time. Setting up direct debits for your bills (or even automatic reminders) is the easiest way to do this.
You might think someone who has never had a cent of debt to their name would have a perfect credit score. But that's not the case.
To prove you are a reliable borrower you need to actually have a history of managing debt responsibly. If you've never had a loan or credit card before it can be hard to show this. You can start to build your credit rating with a credit card.
Just make sure:
Having some debts is good – a borrower with a single credit card and a home loan who never misses a repayment is likely to have a strong credit score.
But if you have 3 credit cards and 2 personal loans, you may struggle to improve your credit score even if you never miss a repayment.
If you can cut down to 1 or 2 credit cards and consolidate your loan debts you can lift your score.
Alternatively, prioritising paying off one of the loans completely would help too. A balance transfer credit card can be the best way to roll card debts into one manageable debt.
Buy now pay later (BNPL) products like Afterpay might not seem like credit products. But using BNPL can harm your credit score.
Missing BNPL repayments will hurt your credit score. And some BNPL providers make a credit enquiry when you sign up, meaning the company takes a look at your credit report. This can impact your credit score too.
When you apply for a loan or credit card the lender requests a copy of your credit report. This is called a hard inquiry and it can negatively affect your report.
This is because multiple applications for credit in a short time are considered a bad sign.
To avoid this:
🔥 Hot tip
Getting rejected for a credit application hurts your credit score because of the hard inquiry mentioned above. Avoid applying for another credit product until you understand why you got rejected for the first one. Multiple inquiries can harm your credit score even more. Checking your own credit score is considered a soft inquiry and doesn't affect the score in any way.
| Response | |
|---|---|
| No | 68.8% |
| Yes | 31.2% |
Unfortunately there is no quick fix or shortcut to improving your credit score. If you have a poor score, it can often take time before you see a huge improvement in your credit rating.
However, by consistently following the steps above you should see your score gradually increase.
One exception may be if you have multiple errors in your credit report that are harming your score. Getting these corrected and removed from your report may have an immediate impact on improving your credit score. In the meantime:
If you've had a very bad run with your finances – missed payments, defaults, a bankruptcy – then time is your friend.
In Australia, defaults stay on your credit report for 5 years. Missed payments stay for 2. If you were declared bankrupt, the bankruptcy stays on your report for 2 years from the end date or 5 years from the date you became bankrupt (whichever of the 2 is later).
So while all the tips we've outlined above are very useful, for people with terrible credit the passage of time also helps a lot. Just avoid getting into more credit trouble in the meantime.
There may be mistakes on your credit report you can fix. And there are companies that offer credit repair services who can fix those for you.
But these companies can charge high fees and are often just doing things you can easily fix yourself, for free.
Paying off debts completely is good financial advice. But it's often worth keeping a credit card you rarely use and have always paid off on time. This card is a good example of your creditworthiness.
Just make sure you keep the limit as low as possible.
If you're struggling to make repayments and need financial help you have options:
Missing a phone bill can end up hurting your credit score, but simply having a mobile plan won't impact your credit report.
The average Australian has a "very good" credit score according to Finder analysis. Here's how credit scores are categorised in Australia, and how to check yours.
Credit reporting bureaus issue credit reports and scores to consumers and lenders. Discover how they work in this guide.
Placing a ban on your credit report can help to protect you from fraud. Here's how to request and extend bans with Experian, Equifax and ilion in Australia.
If you're planning to cancel a credit card, here's what you need to know about the impact it could have on your credit score.
Find out about different credit monitoring services that can keep you informed about changes on your credit report.
How to remove incorrect negative listings from your report and adopt positive money habits to get your credit history back on track.
How to remove enquiries from your report in 4 steps and a guide for improving your credit score.
Discover how you can use a credit card to build or repair your credit history.
If a have a “very good” score of 710, how do I make it excellent? I have never missed it or defaulted any payments etc.
Hi Brenda,
Thank you for getting in touch with Finder.
You’re currently at the right page to learn some tips on how to improve your credit score.
Please note that your credit score is calculated using a range of information from your credit report like the age of your credit file. If your credit file has been recently created you may be seen as more of a risk than someone with a longer-standing credit file. However, this depends on the type of listings on your file.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
I would like help improve my score so it doesn’t pull me back because I’m hoping to buy a new car in the next couple of months.
Hi Ilina,
Thanks for reaching out.
It’s great to know that you’re preparing your creditworthiness before purchasing a new car. Actually, that’s one of the factors that a lender considers if you’re going to get a car loan apart from meeting their other eligibility requirements. So, if you want to improve your credit score, you can basically refer to the simple guides outlined above.
Generally, you would start by getting your credit report and score first so you would have an idea of your current standing. From there, follow the other recommendations outlined in the article. In case, you can also speak to a professional from any of the credit repair agencies.
I hope this has helped.
Cheers,
May
I want my credit score rating.
Hi Yvonne,
Thank you for getting in touch with Finder.
To access your credit score, kindly log in on Finder then click the ‘Get started’ button. Please make sure that you have an Australian passport or driving license ready to obtain a free copy of your score from our page.
I hope this helps.
Thank you and have a wonderful day!
Cheers,
Jeni
Hi. I have multiple (5) outstanding overdue bills (debt) that I have not yet started to pay off. What’s the best way to pay them off slowly in one transaction, per fortnight? Is there a company that will help me get back on track, debt free and get my credit score back up again? Please. Also how long does “bad credit rating” stick to someone’s name? Thank you.
Hi Latailatu,
Thanks for getting in touch with Finder. I hope all is well with you. :)
I’m sorry to hear about your situation. There are at least two things you can do to start paying off your debt. One is to cut down your expenses and two is to increase your earning.
Now, if you have overdue bills from credit cards, you might want to consider doing a balance transfer as this can help you obtain a certain period of time where your bills won’t incur interest rate. There are also other ways to pay off your credit card debts.
Please note that a bad credit rating sticks to your name as long as you don’t improve your financial standing. Once you pay off your debt in a timely manner and improve your credit history, then your score will also improve.
I hope this helps. Should you have further questions, please don’t hesitate to reach out again.
Have a wonderful day!
Cheers,
Joshua
Hi.
I have checked my credit via your website. It is good. I have never got any loan or fine. I always pay my rent and all bills on time. But when applied for a personal loan or getting home internet from Optus, they reject me. I want to know why. What should I do to get them?
Thanks.
Hi Arzani,
Thanks for getting in touch with finder. I hope all is well with you. :)
Yes, it is true that Optus perform credit checks and if you don’t have a good credit score, it could be a reason that your application would be rejected. However, if you are certain that you have a good credit score, then there could be other reasons why you are declined.
It would be a good idea to directly get in touch with Optus and check if they also other options available for you.
I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.
Have a wonderful day!
Cheers,
Joshua