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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.

Get your free credit score and report today

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
Excellent800-1,000
Very good700-799
Good625-699
Fair550-624
Weak0-549
Credit positionEquifax scorePercentile
Excellent833-120081-100%
Very good726-83261-80%
Good622-72541-60%
Average510-62121-40%
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.


Picture: Shutterstock

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66 Responses

  1. 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.

      Cheers,
      Joel

  2. Default Gravatar
    AaronJune 25, 2018

    I would like to update my work information to better help my credit situation.

    • finder Customer Care
      JhezelynJune 25, 2018Staff

      Hi Aaron,

      Thank you for your comment.

      There may be no need to contact the credit bureaus to update the personal information on your credit report.

      You may need to get in touch with your creditors and ask them to update your records with your new address, name or employer. When your creditors send their monthly updates to the credit bureaus, they’ll include your new information and then your credit report will be updated.

      Creditors generally only report once a month, so it could take about 30 to 45 days for the changes to reflect. You may want to check this page too to see what you’ll find in your credit file. I hope this helps.

      Regards,
      Jhezelyn

  3. Default Gravatar
    ConnorJune 15, 2018

    Hi, silly me when I had no idea about credit scores and things that negatively impact it – applied for a few “money fast” personal loans and now have the enquires on my file which I feel is negatively impacting my score. Is there anything I can do to have enquires removed?

    • finder Customer Care
      NikkiJune 15, 2018Staff

      Hi Connor!

      Thanks for getting in touch.

      To remove enquiries on your credit score, you may check this page.

      Hope this was helpful. Don’t hesitate to message us back if you have more questions.

      Cheers,
      Nikki

  4. Default Gravatar
    MichaelJune 7, 2018

    My question is how am I supposed to consolidate my finances if my credit score for some reason is showing weak still. Bankwest have pointed out to me that NAB have been ripping me off and can not only loan me more money to consolidate my loan, however the repayment would still be less than what NAB slug me even with a higher amount of loan. I earn enough money to be eligible, I pay my rent on time always and yet cannot get a loan still?

    • finder Customer Care
      ArnoldJune 8, 2018Staff

      Hi Micheal,

      Thanks for your inquiry

      Debt consolidation is one way to manage repayments and reduce debt if you have more than one account you’re paying interest on. Usually, lenders will require you to have a good credit history to take out one of these loans. However, there are lenders out there who will approve debt consolidation loans for those with bad credit.

      You may consider applying for an unsecured personal loan with a specialist lender. Some lenders offer large, unsecured personal loans to people with bad credit. Alternatively, you may also consider a Part 9 Debt Agreement. These are debt agreements, which are a form of bankruptcy, are an option for people with large debts they are unable to repay.

      For more information about your options, please click on this link.

      Hope this information helps

      Cheers,
      Arnold

  5. Default Gravatar
    MargaretApril 25, 2018

    Hi i have received my credit file/ report which does not indicate anything outstanding/owing against my name, i however have 7 credit enquiries and is still being refused loans etc. My credit score is sitting below average. Im not sure how does this still affect my borrowing power seeing as i dont owe anyone money. The 7 credit enquiry i have are from avenues I’ve been rejected from. So im pretty lost on how this work.

    • finder Customer Care
      JhezelynApril 25, 2018Staff

      Hello Margaret,

      Thank you for your comment.

      Sorry to hear you’re in this situation. By the way, the number of credit enquiries you’ve made can affect your credit score specially if these applications are done in a short space of time. You may want to check this guide to know the factors affecting your credit score.

      Also, kindly check our guide to improve your credit score here. I hope this helps.

      Regards,
      Jhezelyn

  6. Default Gravatar
    CeliaApril 20, 2018

    I applied to a bunch of places for credit card or small loan and thought my score wouldn’t be affected! What can I do about that? It was good according to a report I had awhile ago, I need financial help to go forward and get ahead.

    • finder Customer Care
      JhezelynApril 20, 2018Staff

      Hello Celia,

      Thank you for your comment.

      Firstly, you may need to obtain a credit reportt, this document explains why you got a certain score. Please note that it may take up to 10 days for you to receive your credit report after requesting it.

      Regarding your quest to look for financial help, you have the option to contact the financial counselling hotline which is a free service. See this page for emergency financial assistance options from the Department of Human Services. I hope this helps.

      Regards,
      Jhezelyn

  7. Default Gravatar
    JohnApril 18, 2018

    I have a couple of issues where I disagreed with money owed for alleged services, and I refused to pay them, and I had, in the case of a health club fees, a Doctors certificate which was ignored. Another, I paid about $700 , for building leads that amounted to nothing, so I cancelled my direct debit to them, but they insisted I owed them money.
    How is it these companies can discredit me weather they are right or wrong ?
    Do I need legal action ( more cost, for no reason ) ?
    Cheers John

    • finder Customer Care
      NikkiApril 18, 2018Staff

      Hi John!

      Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

      Sorry to hear that you ran into a few hiccups.

      Please note that we’re a product comparison website and we hold no affiliation with any company/legalities we feature on our site. We provide general information on products to assist you in your buying decision process hence we cannot recommend product / service that is rightfully fit for you.

      You may want to review this page on how to understand how a credit score works.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

  8. Default Gravatar
    SharelleApril 16, 2018

    How do I improve my credit rating

    • finder Customer Care
      NikkiApril 16, 2018Staff

      Hi Sharelle!

      Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

      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:

      Order your credit score and credit file. These two usually come together, or you can order them separately. You can receive your credit file for free once a year and you can receive your free credit score from finder.com.au. When you know your score, check what credit position you fall into – excellent, average, below average, etc. – and you will have a good idea of how you fare to the rest of the population. Your credit file 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 file 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 files 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. If you are unsure how you can improve your position, there are professionals, such as The Credit File Experts, that can assist. Just follow the link at the top of this page.
      Keep an eye on your score and your credit. The most important step to improving your credit score is keeping an eye on it. Make sure you are in a good credit position before you next make an application to ensure you’re approved.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

  9. Default Gravatar
    TimothyApril 11, 2018

    Hey, I need help improving my credit score. I’m below average, and im embarrassed to find help

    • finder Customer Care
      NikkiApril 11, 2018Staff

      Hi Timothy,

      Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

      We’re sorry to hear that you’ve received a low credit score. No need to be embarrassed as this is normal. There are steps on how to improve your credit score here.

      The first thing you have to do is to order your credit score and credit file and check the following.

      Personal information. Ensure all of your personal details are correct. This is to limit the chance of identity theft or being rejected for credit because of a misspelt first name.
      Incorrect defaults. Credit reporting agencies or lenders might list a default incorrectly into your file. A default could be listed twice or you could have a default listed for an account you paid on time. If you find an incorrect default talk to the credit reporting bureau first, then if that doesn’t rectify it you should contact the credit provider. A full process for dealing with incorrect listings is outlined below.

      Keep an eye on your credit score from time to time. Make sure you are in a good credit position before you next make an application to ensure you’re approved.

      Hope this helps! Feel free to message us anytime should you have further questions.

      Cheers,
      Nikki

  10. finder Customer Care
    NikkiApril 10, 2018Staff

    Hi Natalie,

    Thanks for your message and for visiting finder – the leading comparison website & general information service built to give you advice in your buying decision needs. How are you doing today?

    Credit file agencies are required to provide you with a copy of your credit file within 10 days of you requesting it. They are also required to ensure that the credit information they hold on you is accurate, updated and relevant, so you can send them revision requests if you discover any errors in your credit history. You’re eligible to receive your credit file within 10 days if you meet the following criteria:

    You have had an application for credit, such as a loan or credit card, rejected in the previous 90 days
    You have lodged a request for information to be corrected and you have been advised that the information has been corrected
    You have not accessed your file in the previous 12 months (you can view your file for free once every 12 months)

    The information you need to provide will differ with each credit reporting bureau. Generally, you will need the following:

    Your full name
    Your date of birth
    Your driver’s licence number
    Two forms of identification i.e. a copy of your birth certificate, passport or drivers licence
    Your current residential address
    Name of the organisation that you last applied for credit

    To get your credit report you may view this page for more details.

    Hope this helps! Feel free to message us anytime should you have further questions.

    Cheers,
    Nikki

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