Ask Finder: How can I keep my credit score going up?
What makes your credit score rise, and what can you do to help?
We’re committed to our readers and editorial independence. We don’t compare all products in the market and may receive compensation when we refer you to our partners, but this does not influence our opinions or reviews. Learn more about Finder.
First, let's quickly revisit the basics. Your credit score is used by banks and other financial institutions to help decide whether you're eligible for loans and credit cards. A healthy credit score makes it more likely you'll be approved, though it isn't the sole factor in that decision.
The easiest way to keep track of your credit score is through the Finder app on iPhone or Android. It's entirely free to use, shows you your current credit score (from Experian) and notifies you when your score has changed.
What makes your credit score go up?
As our detailed Finder guide to credit scores in Australia explains, there are four basic kinds of activities which can result in your credit score increasing:
- Making timely repayments. Your credit report tracks two years of repayments. So if you missed a repayment two years ago (but it was paid eventually), your score may go up once that two-year period has passed.
- Taking out a credit card or loan. This provides an uptick to your score, as the fact you've been approved is a positive signal. However, that doesn't mean applying for multiple cards will improve your score, as we'll explain shortly.
- Repaying a default. If a defaulted payment is cleared (most likely because you've finally paid it), that can increase your score.
- Defaults and other negative data being removed from your credit report. Inaccurate information can sometimes end up on your credit report. If that information is removed, your score can go up.
A key principle to absorb here. If you're paying your bills, credit card debts and loans on time, it's likely you'll have a good credit score, but it won't be changing very often.
Paying all bills on time, clearing your credit card balance and checking your credit report for errors can all potentially make your score go up. However, that doesn't mean you'll see a new score every single month. Your credit score tracks long-term behaviour and can take time to adjust to changes in your behaviour.
One common mistake? Thinking that applying for multiple credit cards or loans will improve your score. The reverse is true. Multiple card applications can raise a red flag, since they increase your total pool of potential debt. And if you're rejected for a card, that isn't a positive signal either.
A good credit score comes from solid basic money habits: not spending more than you have and paying your bills promptly. Over time, that will lift your score, but you won't necessarily see changes every month.
Should I be trying to get my credit score higher?
If your credit score is under 700, then increasing it can improve your chances of being approved for loans or credit cards. In that case, paying off all existing debts and living within your means, thus demonstrating you're potentially a responsible borrower, makes sense.
However, if you're above 700 (the good range) and especially above 800 (the excellent range), the difference may be less evident.
Remember that a credit score isn't a one-stop score that sums up your financial health. It's a calculation lenders use to try and minimise their own risk. Good money habits have real benefits, but you shouldn't treat your credit score as a total proxy for how well your finances are going.
In short? Your credit score isn't like your ranking in Duolingo or Words With Friends. It won't change constantly, and there aren't easy ways to game the system to increase it. But running your money sensibly ensures your credit score will stay high and grow over time, and helps position you for a more prosperous future.Ask Finder is a regular column where Finder's expert writers answer your questions. All rates and fees are correct at time of publication and we only give general advice. Got a question for Points Finder? Hit us up on Facebook.
- Ask Finder: What’s happening with my Virgin Australia travel credits?
- Ask Finder: Can businesses legally refuse to accept cash?
- Ask Finder: Do I still earn points if my flight is cancelled or changed?
- Ask Finder: Should I buy Velocity Points during a points sale?
- Ask Finder: Should I pay with a card to earn points even when there’s a surcharge?
Picture: Getty Images
More guides on Finder
Citibank Ready Credit
The Citibank Ready Credit unsecured revolving line of credit is available with a 3-year introductory rate of 5.9% p.a. on balance transfers.
Financial Fitness Challenge Week 4: Make your savings and investments work harder for you
This is the final week of our 4-week financial fitness challenge, where we help you understand your savings, super and investments.
Food delivery in Townsville
Without ever leaving your sofa, order food for delivery in Townsville from these apps - and save money while you're at it with our deals.
How to save for a house deposit while still paying rent
SPONSORED: Saving enough for a house deposit while you're paying rent is challenging, but it can be done.
Health Professionals Bank Credit Card
Get an introductory rate of 7.9% p.a. on purchases and balance transfers for 6 months and save with an ongoing $0 annual fee with the Health Professionals Bank Credit Card.
What is a credit score?
Find out what a credit score is and what it can do for you.
How much will a reverse mortgage cost you?
SPONSORED: Calculating the potential costs of a reverse mortgage can be tricky. We'll break it down step by step for you.
Financial Fitness Challenge Week 3: How to get the most out of a credit card
How to cut debt and make your credit card work for you.
How to invest in the MyDeal IPO
The online retailer is expected to raise $40 million as it launches onto the ASX. Here's what you need to know.
Zip Pay and Visa partner up – why this is big news
You can now use Zip anywhere Visa is accepted as well as through Apple Pay and Google Pay.
Ask an Expert