How to Improve Your Credit Score in Australia

Improving your credit score in Australia takes consistent behaviour over time — there are no legitimate shortcuts. The strategies below are based on how Australian credit scoring actually works under the comprehensive credit reporting (CCR) system.

1. Check Your Credit Report First

Before trying to improve your score, understand exactly what is on your file. Get a free copy of your credit report from all three agencies:

• Equifax: equifax.com.au (free annual report)
• Experian: experian.com.au (free via creditworks or annually)
• illion: getcreditscore.com.au (free)

Free ongoing score monitoring is available via:

• Credit Savvy (Experian score, free)
• Get Credit Score (Equifax score, free)
• Most banks now show your Equifax score in their app (CommBank, ANZ, Westpac, NAB, ING)

Look for: errors, defaults you don’t recognise, enquiries you didn’t authorise, outdated information.

2. Dispute Errors Immediately

If you find inaccurate information on your credit report:

1. Contact the credit reporting agency directly (online dispute form on each agency’s website)
2. Also contact the lender who reported the incorrect data
3. The agency must investigate and respond within 30 days
4. If unresolved, escalate to the Australian Financial Complaints Authority (AFCA) — afca.org.au

Errors are more common than people expect. Incorrect defaults, incorrect account details, or outdated information that should have been removed can all be disputed and corrected.

3. Pay Every Bill and Repayment on Time

Under CCR, every on-time repayment on credit cards, personal loans, home loans, and buy now pay later is now recorded as positive data on your file. This is the single most powerful ongoing action.

• Set up direct debits for at least the minimum repayment on credit cards
• Set up calendar reminders for BPAY or manual payments
• Pay at least the minimum — missing even one payment creates a negative mark

Late payments (30+ days overdue) are recorded on your file. Defaults (serious overdue debts of $150+) stay on your file for 5 years.

4. Reduce Credit Utilisation

Credit utilisation is how much of your available credit limit you are using:

$$\text{Utilisation} = \frac{\text{Current balance}}{\text{Credit limit}} \times 100$$

Using a high proportion of your credit limit can reduce your score. A general guide is to keep utilisation below 30% — lower is better.

Strategies:

• Pay down credit card balances before the statement closing date (not just before the due date)
• Request a credit limit increase (this increases the denominator, lowering utilisation) — but only if you will not then spend more
• Pay off credit card balances in full each month where possible

5. Avoid Multiple Credit Enquiries in a Short Period

Each time you apply for credit, a hard enquiry is recorded on your file. Multiple enquiries in a short period reduce your score because lenders interpret this as financial stress or a pattern of declined applications.

• Do not apply for multiple credit cards or loans simultaneously when shopping around
• Use tools like rate.com.au or Canstar to compare products before applying
• If using a mortgage broker, they can submit a single application rather than you applying to multiple lenders directly
• Checking your own credit score is a soft enquiry and does not affect your score

6. Keep Old Accounts Open (If Fee-Free)

The age of your credit history is a factor in your score. Closing your oldest credit card account reduces the average age of your credit history.

If an account has no annual fee, consider keeping it open even if you rarely use it — a small recurring charge and payment each month keeps the account active and contributes positively to your repayment history.

7. Resolve Defaults and Debts

If you have a default or overdue debt:

• Pay it off — a paid default is better than an unpaid one, though both remain on your file for 5 years from the date listed
• Contact the creditor to negotiate a payment plan or settlement if the full amount is unmanageable
• Consider speaking with a free financial counsellor — the National Debt Helpline (1800 007 007) provides free advice

After paying off a default, update your credit file — the agency will note the debt as paid, which helps somewhat even though the original listing remains.

8. Allow Time

Credit scores improve gradually. Consistent positive behaviour over 12–24 months typically produces meaningful improvement. There is no legitimate way to instantly boost your score significantly — be wary of companies claiming to “fix” your credit score for a fee.

Typical timelines:

• Enquiry effects: fade over 12 months
• Default effects: reduce gradually over 5 years
• Positive repayment history: builds up month by month under CCR

FAQ

How long does it take to improve a credit score? With consistent positive behaviour — on-time payments, reduced utilisation, no new enquiries — most people see meaningful improvement within 12–18 months.

Can a company fix my credit score for money? Legitimate negative information cannot be removed from your file before its legal retention period expires (5 years for defaults). Any company claiming to remove accurate negative entries for a fee is likely to be a scam. Free dispute services via the credit agencies and AFCA handle legitimate errors at no cost.

Does paying off a default remove it from my file? No — a paid default still appears on your file for 5 years from when it was listed. However, the status is updated to “paid” which is viewed more favourably by lenders than an unpaid default.

See also: Credit Score Australia — How It Works | Check Your Credit Score for Free

For free financial counselling, contact the National Debt Helpline on 1800 007 007.