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Improve your credit score

Find out what makes up your credit score so you can work to improve it.

A credit score is a rating based on the information on your credit report. Throughout your life you make various applications for credit, whether it be for loans, credit cards, utilities or even phone bills, and your ability to manage those accounts is recorded on your credit report. This helps other lenders make informed decisions about whether to lend to you. Your credit score is another factor that helps lenders and credit providers make those decisions.

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This guide will show you what information goes into your credit score and how you might be able to improve it

What is a credit score?

A credit score is a numerical representation of your credit history. Each credit bureau determines your credit score differently. For example, your credit score from credit reporting bureau Experian will be a number between 0 and 1,000.

Lenders and credit providers use the information in your credit report as well as your credit score to make decisions about whether or not you are a reliable borrower. Finding out your credit score can tell you where you sit in the credit-active population, whether or not you have "good" credit or just "average" credit, and if you might be able to improve your credit position.

How does a credit score work?

Your current credit score is a useful number to know before applying for credit. If you have a credit score in the higher credit bands, you are likely to be approved for credit (if you can afford the loan you are applying for). If you have a low credit score a lender may look harder at your application for credit to ensure you can afford the loan. Let's look at the credit score bands for Experian and Equifax:

Credit bandExperian score
Very good700-799
Credit positionEquifax scorePercentile
Very good726-83261-80%
Below average0-5090-20%

How is my score calculated?

Your credit score is determined by the information that's included in your credit report.

  • Your personal information. Your age, how long you've been employed and the time you've been at your current address is used to calculate your risk.
  • Age of your credit report. The length of time your credit report has been active has a direct effect on your credit score.
  • Type of credit providers. The type of credit providers you've applied for and held accounts with will also impact your score. For instance, if you've held an account with a bank it will carry a different level of risk than a store finance provider.
  • What credit you've held and the credit limit. Your score will largely be determined by the risk associated with the type of credit requested in your loan application. The credit limit or loan amount you request will also determine your credit risk index and affect your final score.
  • The number of credit enquiries listed on your file. Any time you make an application for a loan, credit card or utility account, it will be added to your credit file. Frequent applications for credit raise your risk index and lower your credit score.
  • The pattern of your credit enquiries and shopping over time. Many credit enquiries within a short period of time may be a red flag to lenders. Defaults and other serious infringements in your credit history also affect your score negatively.
  • Default information. If you have overdue debts, serious credit infringements or clearouts it will negatively impact your credit score.
  • Court writs and judgements. Any listing indicating a court writ or default judgement will decrease your credit score as it's an indicator of increased risk.

What you need to do to improve your credit score

Improving your credit score starts with understanding where you're at with your finances and your credit, and then working to improve them. As your finances improve your credit score will improve with it. Here is a quick guide to improving your credit and financial position:

  • Get your credit score and credit report. You can order both your credit score and your report for free through finder. When you know your score, check what credit band you fall into – excellent, fair, weak, etc. – and you will have a good idea of how you fare to the rest of the population. Your credit report can then give you a more in-depth understanding of your financial position so you can make actionable changes.
  • Check your file for high-risk listings. Listings can include multiple credit enquiries in a short space of time, high credit limit credit cards, multiple loan accounts and of course, bad credit listings such as defaults, serious credit infringements and bankruptcies.
  • Identify listings that you can improve. No two credit reports are the same and so the same improvement process will not be the same for everyone. However, there are a few ways you can improve your credit score. For instance, if you have a high credit limit credit card that you aren't using, you can consider lowering it. If you have multiple personal loans and credit card debt, you can consider consolidating it.
  • Keep an eye on your score and your credit. The most important step to improving your credit score is keeping an eye on it. Finder will give you an updated credit score every month and will notify you any time something on your credit report changes.

Quick tips to improve your credit score

  • Redirect your bills when moving. To prevent your bills from being listed as defaults when you change your address, ensure that you provide your new address to banks, utility companies, phone companies and other lenders so that your bills are redirected to the new address.
  • Pay your bills on time. Missed or late payments on some credit contracts (for example, home loans, personal loans and credit cards) can affect your credit score negatively, so ensure that you make the minimum payments on all your accounts on time.
  • Consolidate your debt. Consolidating several loans into one can make it easier to manage repayments. It also helps you to save on fees.
  • Check your credit report regularly. This will help you monitor your credit applications so that you flag any applications or enquiries made as a result of identity theft.
  • Do your credit homework. To avoid getting into unnecessary debt, only apply for credit when you need it, and remember to arrange for a repayment plan that suits you to avoid missing repayments. It also helps your credit score if you space out your credit inquiries.

Why is it important to check my credit report?

Checking your credit file regularly helps ensure that everything is in order in your credit report and that your credit score remains healthy. You should order and review your credit report to:

  • Check that all your personal details are entered correctly in your file
  • Ensure that all loans and debts listed are actually yours and that you have not been a victim of identity theft
  • Check for incorrect defaults or debts listed twice and request corrections or for notes to be added to the report.

How can I deal with incorrect listings on my credit file?

You have the right to update your credit report in order to remove outdated or incorrect listings.

If you discover errors about your personal details, including if adverse listings have been entered twice, you should contact the credit reporting agency from which you ordered the report and request them to make amendments. You also have the option to contact the creditor that listed it directly.

Have more questions about your credit score or report?

How does my credit score impact my credit application?

Lenders depend on credit scores from top credit bureaus, along with your credit report, to determine whether you are likely to default on a loan or credit card. A bad credit rating indicates the possibility of an adverse event occurring in your credit file in the coming months, therefore making lenders reject you for credit or charge you extra for the credit to cover their risk.

Can creditors make erroneous listings on your credit report?

Yes, creditors tend to sometimes list a default onto your file when in fact the debt is in dispute, or list defaults without giving you the required notice that your account is due. This is why you should monitor your credit file yearly and dispute any wrong listings with the help of a credit repair agency.

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84 Responses

  1. Default Gravatar
    RichardSeptember 25, 2018

    what is the best way to look at good credit scores

  2. Default Gravatar
    MohammedSeptember 18, 2018

    How often is my credit score reviewed? Lets say its 500 now. If I don’t make any credit inquiries for the next 2 months, will it increase or is that too short?

    • finder Customer Care
      JohnSeptember 18, 2018Staff

      Hi Mohammed,

      Thank you for leaving a question.

      There are a lot of factors that affect the increase or decrease of your credit score. A couple of them being Repaying a default, Bankruptcies, Adding a new credit account and other. You may read more on this by clicking on this link. Having no credit inquiries will help you because it will not decrease your score but it would not be able to help in increasing it. Companies submit credit updates monthly which gives you ample time to improve on your current score. Hope this helps!


  3. Default Gravatar
    IvanSeptember 2, 2018

    I am wondering why my credit score is so low as i dont have any loans an i donot have any credit cards i havent applied for any loans for more than 12 months
    Thanks Ivan

    • finder Customer Care
      JoelSeptember 2, 2018Staff

      Hi Ivan,

      Thanks for leaving a question on finder.

      Due to the amount of information that is used to calculate your credit score, it’s easy to see how your score can fluctuate. Still, if you don’t believe much has altered in your financial habits and your credit score still has changed, it can be confusing. Here are a few common reasons why credit scores change:

      1. You applied for a new loan or credit card. Any new applications you make for credit will directly affect your credit score. Keep in mind that you don’t need to be approved for the application for it to be listed on your credit file and therefore affect your credit.
      2. A listing on your credit file expired. Information is only held on your credit file for a certain length of time, so when a listing is removed from your credit file this will positively impact your credit score.
      3. You changed your credit limit. Increasing limits on your credit cards or applying for a personal loan top-up (which usually constitutes a new personal loan application) will usually negatively impact your credit score. Similarly, decreasing your credit limit can positively impact your credit score. In both cases, your new credit limit will also be listed on your credit file.
      4. A credit provider reported new information to a credit bureau. Credit providers don’t always immediately report information to credit reporting bureaus, so you may find your credit score change at a seemingly random time. This newly reported information, which can include default information or even credit enquiries, can be the cause.
      5. New comprehensive data was added to your report. Starting from 1 July 2018, the Big Four banks have been mandated to report comprehensive data to credit bureaus. Half of this data will be added in the 90 days following this date, with 100% of the data to be added by September 2019. This will affect your credit score. Other banks can add it in their own time and the Big Four banks – CommBank, ANZ, Westpac and NAB – can choose which data they add at which time. Find out more here.
      6. You closed a loan or credit card. Your credit score may improve if you close a loan or credit card. Only credit limits are listed on your credit file, not the current debts on your accounts,
      7. You made a repayment on a credit account late. Your monthly repayment information is now listed on your credit file and can directly affect your credit score. If you don’t make a repayment on time it will cause your credit score to drop, but if you have a low credit score, making monthly repayments on time can have a positive impact on your credit score.

      You can also request a free copy of your credit file by clicking HERE. Your credit report will list all that could be affecting your current credit score. You can have incorrect details removed if you request a revision from a credit reporting agency. Overdue debt and credit application information can only be updated by your credit provider, so you may have to follow it up with them.


  4. Default Gravatar
    AnilSeptember 2, 2018

    wbat is the period of time that a default listing stays on your credit report ?

    • finder Customer Care
      JoelSeptember 2, 2018Staff

      Hi Anil,

      Thanks for leaving a question on finder.

      A credit default listing remains on your report for 5 years (in the case of a clearout it remains for 7 years). If you pay your debt, the listing stays but your credit report will be updated to show that you have made payments.

      When you apply for credit, for example for a home loan or business loan, you may be rejected on the basis that there is a default listed on your credit report. Credit providers must tell you if your application has been rejected because of something in your credit report.


  5. Default Gravatar
    DonnaAugust 21, 2018

    How do i get 1 of my files remove as i didnt apply that much on anz. I look on my credit report i didnt apply for that much in anz how do i get remove

    • finder Customer Care
      JoelAugust 21, 2018Staff

      Hi Donna,

      Thanks for leaving a question on finder.

      You can’t remove a legitimate enquiry from your credit file. In most cases, you will simply have to wait until the five years has passed and they are taken off your history.

      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 by contacting ANZ directly. For more info about this, please click HERE.


  6. Default Gravatar
    ScottAugust 20, 2018

    How long after court actions are resolved so they effect your credit ratin

    • finder Customer Care
      JohnAugust 21, 2018Staff

      Hi Scott,

      Thank you for leaving a question.

      Once you’ve been through the court process the court judgement will remain on your credit file for 5 years.


  7. Default Gravatar
    SamuelAugust 17, 2018

    How does the inquiries affect credit score? What’s the best way to improve credit score?

    • finder Customer Care
      JhezelynAugust 18, 2018Staff

      Hello Sam,

      Thank you for your comment.

      Each time you make an application for credit, it’s going to be listed on your credit file as a “credit enquiry”. Hence, enquiries can affect your score and it will stay there for five years. It will be listed regardless of whether the application is approved or not. Types of accounts you can make enquiries for are credit cards, personal loans and even utilities such as phones, gas and electricity.

      You may please check our guide to improve your credit score. You can see on the page the tips on how to improve your score and how it’s calculated. I hope this helps.

      Should you wish to have real-time answers to your questions, try our chat box on the lower right corner of our page.


  8. Default Gravatar
    JoanneAugust 13, 2018

    I have been repaying a bank loan for the past few months and I was under the impression that my credit score would slowly increase every time I made my monthly repayment but this hasn’t happened. Is that supposed to happen? Also, does my credit score increase by many points when the loan is finally paid off? One last question – what would make my credit score increase higher – if I let the loan continue for the 3 year period and make monthly repayments on time OR pay it off early with a lump sum after about 6 months? I hope you can answer these questions for me. I look forward to your reply. Thank you.

    • finder Customer Care
      JhezelynAugust 14, 2018Staff

      Hello Joanne,

      Thank you for your comment.

      Making repayments on time can definitely improve your credit score. Your ongoing repayments are listed on your credit report. Making additional repayments can also be a good option to consider because it will let you pay off your loan ahead of schedule, then your score will improve when the account closes. Please note that 2 years of your repayment information is listed on your report.

      To improve your credit score, best to keep an eye on your credit report and check your credit score regularly. You can see some credit activities and their effect on your Experian credit score here. I hope this helps.

      Should you wish to have real-time answers to your questions, try our chat box on the lower right corner of our page.


  9. Default Gravatar
    LynkenAugust 7, 2018

    Hi am I able to remove paid personal loans? And I see a lot of enquiries iv made that I didn’t proceed in am I able to get them removed to improve my credit score

    • finder Customer Care
      JoelAugust 7, 2018Staff

      Hi Lynken,

      Thanks for leaving a question on finder.

      You can have the paid personal loans in your account if you contact the lender to have it updated or removed. However, you can’t remove a legitimate enquiry from your credit file. In most cases, you will simply have to wait until the five years has passed and they are taken off your history.

      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.

      We have detailed the steps on how to remove incorrect details in your credit score if you click HERE.


  10. Default Gravatar
    annieJune 30, 2018

    I am on the aged pension. I have not had any credit cards/ loans etc for about 15 years. Recently applied for a car loan and was rejected. I own my own home and have no debts. So probably have no Credit score??

    • finder Customer Care
      JoelJuly 1, 2018Staff

      Hi Annie,

      Thanks for leaving a question on finder.

      The first thing you need to determine is if you indeed have a credit score by going to THIS link. Lenders have different eligibility criteria in approving a loan and credit score is one of it.

      Knowing your credit score and your credit report will give you a good understanding of your financial situation and help you feel more confident when making decisions about your money. Plus, in the near future, your credit score will become more and more important to any loan applications that you make.


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