Five ways to improve your credit score

Concerned about your credit history? Here are some practical ways to boost your credit score going forward.

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If you have a low credit score and want to improve your chances of approval the next time you apply for a loan, there are steps you can take to increase your score. From checking your credit score to managing your accounts, you can use this guide to learn how to strengthen your financial history.

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How to improve your credit score in 5 steps

If you want to apply for a credit card or loan but are worried about your credit score, there are some simple steps you can take to get your financial history back on track and improve your chances of approval:

1. Order a copy of your credit score and report

If you're concerned with your credit score, you can confirm where you stand by ordering a copy of your credit file and credit score. You can get a free copy of your credit report with finder. Your credit score is usually a number between 0 and 1,000, which can give you an indication of your financial position. You can learn more about what is considered a good or bad credit score in this guide.

If your credit score is low, you should review your credit report and look out for any incorrect enquiries or black marks (such as defaults or late payments) that are on your account. You can see our guides to removing invalid enquiries or black marks from your credit file for more information.

Once you've reviewed your credit report and removed any incorrect information, you can review your financial accounts to get your money in order.

2. Maintain an active credit account

If you're applying for a new line of credit, lenders are looking for evidence of healthy repayment behaviour to ensure you're a responsible borrower. If you have no lines of credit open, you could have zero credit history which may also reduce your chances of approval.

If you don't have an active credit card or loan, a postpaid mobile phone plan or utility account in your name can help you build your credit history. Make sure they are all registered to your name and address and that they're in good standing (with no defaults).

3. Pay your bills on time to avoid negative listings

Paying your bills on time is a simple way to improve your credit file. If you have an overdue payment above $150 for more than 60 days, it will be considered a default and remain on your credit report for five years. To avoid late payment fees, you should pay your credit card bill (for example) by the statement due date. But you'll need to pay it within a 60-day period to avoid it remaining on your credit file for five years. Writs, judgments, bankruptcies, and clearouts are listed on your credit file for seven years.

You can only remove a default from your account if it was incorrectly applied, so it's best to nip them in the bud before they're listed. If you struggle to keep track of your bills, set up a regular direct debit or automatic payment to pay your accounts on time. If you really can’t make a repayment, consider appealing to your lender for a hardship extension. You can usually negotiate an alternative and more lenient repayment plan if you explain your situation at an early stage.

4. Seek professional help from credit repair agencies

If you have found incorrect black marks or defaults on your credit file, you can contact a credit repair agency for help removing them. These agencies use legislation to determine whether any negative listings on your file were put there without a credit provider adhering to the relevant laws. However, these agencies can only remove incorrect listings from your file. You'll also have to pay a fee to use a credit repair agency, so you'll need to weigh up whether or not the cost is worth it before you start the process. You can see our comprehensive guide to credit repair for more tips.

5. Avoid too many hard credit enquiries

Each time you apply for any form of credit, the financial institution will make an enquiry on your credit report. This is called a “hard” enquiry, as opposed to a “soft” enquiry where you request your own credit report. Too many hard enquiries can have a negative impact on your credit score. If your application is rejected, avoid applying for another product straight away. Instead, take the time to pay down your accounts so that your credit history demonstrates positive repayment behaviours.

Improving your credit score can take time, but there are some straightforward steps you can take to lift your score. If you're considering applying for a line of credit but are worried about your credit score, request a copy of your credit score and follow the steps above to get started.

Learn how your credit report can affect your credit card

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47 Responses

  1. Default Gravatar
    kennethFebruary 24, 2019

    Hi, my application to switch to another Mob-phone coy was rejected recently, so I stayed with my current phone coy. However i now know i need to improve my credit score for any future applications.

  2. Default Gravatar
    TrentApril 4, 2018

    I applied for 15 different lines of credit over the space of a year. I was rejected all 15 times eventually because I had been rejected the 2nd time. I kept applying thinking there was something wrong but it was actually because I was being constantly denied. This is not a true representation of my credit rating is there any way to change this as it has a negative effort on my rating. Thanks

    • Avatarfinder Customer Care
      JoanneApril 4, 2018Staff

      Hi Trent,

      Thanks for reaching out.

      A “hard” enquiry refers to any request for your credit file that’s made by a third party, such as a lender. For instance, every time you apply for a line of credit, such as a card or personal loan, the lender you’ve applied to will submit a request for your credit file. This request is recorded on your credit history as a “hard credit enquiry”. While a few of these enquiries is usually fine, too many hard enquiries on the credit file can suggest to lenders that one is unable to manage credit accounts responsibly, and may lead to a declined application.

      In general, the only details that can be removed from your credit file are those that are incorrect or erroneous. For example, if a lender made an enquiry without proper authorisation from you, if your name was attached to an account you never opened, or if an account was incorrectly listed as “in default”. In these cases, you can submit a request to have the incorrect details removed from your file. You can read further on about the process of removing enquiries from your credit file on this page.



  3. Default Gravatar
    JoshApril 2, 2018

    I have viewed my credit score and as I assumed it isn’t that great because, as I suspected, I have too many hard enquiries on my file. I pay my statement periods in full on my cards and have for a while now to dodge interest. I have no court writs or bad unpaid debts. Being across all my bill payments and making them on time is paramount and I’ve not missed a payment or minimum payment (when times can be tough).
    The hard enquiries, especially over the last year, are what brings me down. I am now avoiding any hard enquiries that I have by simply just not applying for anything and tackling my debts head on and bringing them down.
    My only concern is do I have to wait a whole five years until I am confident to apply for credit again? Or if I avoid any form of hard enquiry say for the next 2 years am I able start being confident to apply for credit or a refinance on mortgage? even though they are still listed within this five year period?

    Also my next question after that. Although my credit cards are paid and in line, does the amount of revolving credit I still have available (credit limit) have an effect on my score? I am not constantly using it but in The event of an emergency I feel at ease that it’s there. Even though it’s highly unlikely that I’ll ever use it.
    Thank you for your time.

    • Default Gravatar
      ArnoldApril 2, 2018

      Hi Josh,

      Thanks for your inquiry.

      Regarding your first question, Inquiries remain on your credit reports for five years.

      For your second concern, although you now have a bad credit rating, there are still options you may try to get credit. Please check available options on this link. Please make sure to study the eligibility requirements before applying to avoid being disapproved.

      For your last question, debts being paid on time does not affect your score negatively. In fact, these payment reflects your ability to handle repayments which in turn affects your credit record positively.

      Hope this information helps


  4. Default Gravatar
    JohnOctober 13, 2017

    How do I order my credit file to check it?

    • Avatarfinder Customer Care
      JudithOctober 14, 2017Staff

      Hi John,

      Thanks for contacting finder, a comparison website and a general information service.

      You may obtain a copy of your credit file once a year from any of the main credit reporting agencies. If you reside anywhere in Australia you can order your file from Equifax or Dun & Bradstreet, and if you reside in Tasmania you also have the option of ordering it from the Tasmanian Collection Service.

      I hope this helps.

      Best regards,

  5. Default Gravatar
    GrahamApril 6, 2017

    Is there the concept of “credit card utilization ratio” in Australia like in the USA? In USA if you spend more than 30% of the credit limit it’s considered a negative thing for building up your credit.
    Does Australia banks care about that?

    • Avatarfinder Customer Care
      MayApril 6, 2017Staff

      Hi Graham,

      Thank you for your inquiry.

      The “credit card utilization ratio” scheme/concept on credit cards is not available in Australia. You’re allowed by the bank to spend up to your credit limit and this does not affect your credit score. In Australia, factors like payment defaults, credit enquiries, several credit applications, among others, can result in a negative/bad rating.


  6. Default Gravatar
    AdamSeptember 20, 2016

    A few months ago I applied (and was accepted for) an American Express card. This has caused my Credit Score with Experian to drop from 747/1000 to 603/1000 and my Veda Score to drop from 850/1200 to 683/1200.

    I have 0 defaults, judgement, bankruptcies etc and have never missed a payment on anything in my life. My overall credit utilization is probably around 15-20% at most and monthly I either pay my cards off in full, or a large portion of the balance (at least 50%).

    Both Veda and Experian show 6 enquiries between Jan 2012 and Apr 2016 (The latter being my AMEX application). Prior to the AMEX my last enquiry was over 2 years prior in March 2014. This seems to be huge hit on my credit score upon applying for the AMEX card – is that normal?

    My score seems very low for someone who has a completely unblemished credit record. I have a relatively high income (well into 6 figures) and could happily service any debt even if I maxed out the 3 credit cards I hold – which I have never gotten close to doing. One of those cards has a relatively high limit which is useful as I travel, and I have clearly demonstrated my ability to service it (and the bank always offering me more).

    I like to have at least 2 cards (with different banks) when travelling in case of issues, and I applied for the Amex primarily to take advantage of a Qantas points deal which I have done. If I cancel the Amex card – is my credit score likely to improve? I have no real need for it now I have got the points, but it may be handy to keep if cancelling it won’t improve my score as it has good Qantas points earn for certain things.

    I’m really not sure what else I can do to improve my score – it seems to be quite bad considering I have an unblemished credit history. I may want to get a mortgage in the next year or two and I want my score to be a good as possible to allow me to negotiate the best rate.

    • Avatarfinder Customer Care
      YsaSeptember 21, 2016Staff

      Hi Adam,

      Thanks for reaching out and I’m sorry to hear about the situation you’re going through.
      Just to confirm though, you have come through, an Australian financial comparison website and general information service. As we are not credit experts, we can only provide you a general advice regarding the products we display.

      However, there could have been a number of factors why a credit rating is lowered. Some reported reasons include multiple credit card applications, balance transfers, payment defaults and credit enquiries.

      For further tips and information, you may wish to check our credit repair guide and some credit alternatives if you have a bad credit rating.

      If you are also considering to get a mortgage in the future, it would be best to speak to a mortgage expert about refinancing options to assist you with the process. This article might also help you gain an insight on how to increase your chances of approval even with a bad credit.

      I hope this helps. Please let me know if I can assist you further.


  7. Default Gravatar
    AhmedJuly 27, 2016

    I have a credit score of 420, the only thing on my credit report was applying for post-paid contract with Optus for 2 years in last November and credit card in last December then I canceled my contract with Optus after two months and I pay all my bills and credit cards arrears on time. However, my credit card goes from 360 to 420 only within 6 months.

    my report doesn’t show that I canceled my contract with optus.
    also, I got an offer to increase my credit card limit, is this affecting my credit score?


    • Avatarfinder Customer Care
      MayJuly 28, 2016Staff

      Hi Ahmed,

      Thank you for your question.

      Yes, your credit card limits have an effect on your score, so if you can afford to reduce limits you may want to consider doing it. If you also want to improve your credit score, you may want to check this article and find more information from our guide.


  8. Default Gravatar
    IsobellaMay 1, 2016

    I have a credit score of about 560. The only thing on my credit report was a $12000 loan I applied for and got rejected.
    How do I remove this from my file and improve my score?


    • Avatarfinder Customer Care
      MayMay 3, 2016Staff

      Hi Isobella,

      Thanks for reaching out.

      Usually, credit applications, enquiries and overdue accounts are held on your file for 5 years. The only way to get any listings removed in your file is if they were recorded in error or incorrectly. You can contact the lender directly or you may want to work through a credit service to make sure that the listing is lifted.

      Please feel free to visit this page to find invaluable information about your credit file. There are also tips on how you can improve your credit score here.

      I hope this has helped.


  9. Default Gravatar
    JustinApril 13, 2016

    I have a current credit rating score of 512 which I believe is a tad below average.
    This is due to defaulting on a personal loan. I paid out the loan and it has last month removed from my credit file.
    The only default I have left on my file is an Optus bill I defaulted on due to changing address and not receiving a statement. It is now fully paid and settled. It will be 4 years until this removes from my file.

    My question is around what type of credit score do I need to have before I apply for a line of credit to strengthen my credit rating? I am looking at purchasing a house in the next couple of years and I am sick of the bank saying I am eligible for credit due to my salary and then declining me due to credit score which effects my score.

    Can you please give me some idea?

    • Avatarfinder Customer Care
      MayApril 13, 2016Staff

      Hi Justin,

      Thanks for your inquiry.

      Indeed, your credit score will determine how attractive you appear to credit providers, especially if your credit file has already a mark of default. Therefore, it is important to improve your score before applying for credit. This score ranges from 0-1200, with higher ratings indicating better creditworthiness which is displayed as a percentage and a number. For a “good” credit score you must get 41%-60%.

      You can actually find invaluable information on credit scoring on this page.

      Hope this helps.


  10. Default Gravatar
    BillNovember 19, 2015

    Due to poor life choices I have a berry poor rating of 251 I have made no defaults in the last 7 years I have had one telco contract witch is direct debited and has been paid on time for over 3 years now when can I expect my credit score to improve on my credit report card on credit savvy I have one special credit relationship listed and only two credit enquires is there a way to improve my score

    • Avatarfinder Customer Care
      JonathanNovember 22, 2015Staff

      Hi Bill, thanks for your inquiry!

      A good place to start with assessing your credit score is requesting a copy of your credit file. Paying your bills on time is one of the ways you can improve your score, please see our page on improving your credit score for more methods and positive actions you can take.



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