How to Increase Your Credit Score – Fix Your Credit Score 2026

Step By Step Guide On Fixing Your Credit Score

1. Check Your Credit Report & Score

The first step in fixing your credit is to check your credit report. In Australia, two major credit reporting bodies manage your financial history: Equifax and Experian. Experian is relatively new to the market. You are entitled to a free credit report from each agency once every 3 months and once every time your credit report is amended or if you’ve been denied for credit.

Once you have your credit report, examine your report closely for any inaccuracies. Check your credit score, too. Generally, credit scores range between 0 and 1,200 in Australia, and anything under 500 can be considered a low score depending on who is reviewing it. Once you know your score, you can begin creating a plan to fix your credit score.

Note: Be careful to avoid other credit scoring companies that offer their own credit score. Not only are these completely inaccurate, but they often only hold information from one of the reporting bodies and are in the business of offering you financial products for maximum profits.

2. Identify What’s Hurting Your Credit Score

To fix a bad credit score in Australia, you need to identify what’s dragging your score down. The most common culprits include missed payments, defaults, court judgments, and multiple credit enquiries. Even small things, like being late on your phone bill, can impact your score negatively.

In Australia, a bad credit score often comes from unpaid debts or defaults recorded on your credit report. Court judgments and bankruptcies can also tarnish your score for up to five years. Knowing exactly what’s contributing to your bad credit will help you map out a solution to repair your credit score in Australia.

3. Remove Negative Items from Your Credit Report

Now that you’ve identified the issues, it’s time to remove negative items from your credit report to begin the first steps of clearing your bad credit history. Defaults and court judgments are extremely damaging, so they need to be addressed first.

Here is a blog post we made that goes deeper into finding and clearing defaults.

Note: Paying your default does not remove it. The listing only gets updated to paid, but you will still have bad credit.

Some lenders in Australia are known to place inquiries on your credit report, even for small amounts, under $5,000, or from low-tier lenders. These inquiries can harm your credit score.

4. Amend Late Payment History

Your payment history will reflect if you’ve consistently been late on bills. Unfortunately, this part of your credit report can also drag your score down. However, amending your late payment history will make a significant difference.

Going forward, ensure that all your payments are made on time. Set up automatic payments to prevent missing deadlines.

Employing a professional credit repair service like Credit Wipe Australia can help you remove defaults, court judgments, and other negative listings from your credit report. We specialise in helping Aussies clear their bad credit history in Australia and start fresh.

5. Build/ Increase Your Credit Score

Once you’ve cleared your bad credit report history, the next step is to increase your credit score. Start by managing your credit responsibly. 

Building a good credit score takes time, but every positive step you take helps improve your score.

For example, suppose you’ve recently improved your credit score in Australia by removing negative marks, maintaining a low credit utilisation ratio, and making timely payments.

In that case, your score will be further enhanced. Remember, each action towards responsible credit use is a step towards a stronger financial future. Below goes into further detail on how to quickly increase your credit rating in Australia.

How To Increase Your Credit Score Quickly

The reality is that in Australia, you cannot improve your credit score overnight. Regardless of the reason as to why you have a low credit score, it will take a minimum of a few months to increase your credit score.  Some of the quickest ways to improve your credit score are listed below

Pay Your Bills on Time

One of the most straightforward ways to improve your credit score is by paying your bills on time. Setting up auto payments can ensure you never miss a due date. Consistently making on-time payments shows lenders that you’re responsible and can increase your credit score. For instance, if you’re worried about forgetting to pay your credit card bill, setting up an auto payment ensures it’s paid monthly without you lifting a finger.

If you ever find yourself in a situation where you can’t afford a bill, contact your bank immediately. Most banks understand and may offer assistance or work out a payment plan with you. Remember, keeping your bill payments punctual is a key part of learning how to improve your credit score over time.

Check Your Credit Report for Errors

One of the quickest ways to potentially improve your credit score is to check your credit report for incorrect information. Errors such as defaults that do not belong to you, incorrect repayment records, duplicate debts or outdated information could negatively affect your credit score.

In Australia, you can request a free credit report from credit reporting bodies such as Equifax, Experian and illion. Review your reports carefully and dispute any information that is inaccurate or does not belong to you.

If an error is confirmed and corrected, your credit score may improve once the relevant information is updated. However, there is no guarantee of an immediate increase, and accurate negative information cannot simply be removed because it lowers your score.

Pay Down Outstanding Credit Card Balances

If you have credit card debt, reducing your outstanding balances is a practical step towards improving your overall credit profile. High levels of existing debt can affect how lenders assess your ability to manage additional credit.

Start by reviewing your credit card balances and prioritising repayments towards outstanding debt, particularly if you are approaching your credit limits. Paying more than the minimum repayment, where possible, can help you reduce your debt faster.

Although paying down credit card debt does not guarantee an immediate increase in your credit score, it can improve your financial position and may help when lenders assess your credit applications.

Bring Overdue Accounts Up to Date

If you have missed repayments or overdue accounts, getting them back on track should be a priority. Contact your lender or service provider to confirm the amount outstanding and discuss a repayment arrangement if you cannot afford to pay the full amount immediately.

Where possible, bring overdue accounts up to date and continue making repayments by their due dates. If you are experiencing financial hardship, ask your lender about its hardship assistance options rather than ignoring the debt.

Keep in mind that paying an overdue account does not automatically remove a default or erase your repayment history. However, addressing outstanding debts can help prevent your financial situation from deteriorating further.

Check for Identity Theft or Fraudulent Credit Applications

Unexpected credit enquiries, unfamiliar accounts or debts you do not recognise could indicate an error or potential identity theft. These issues are worth investigating promptly because fraudulent activity may affect your credit report and applications for future credit.

Review your credit reports for unfamiliar activity. If you identify a suspicious enquiry or account, contact the relevant credit provider and credit reporting body to investigate it. You can also consider placing a ban on your credit report to help protect against certain forms of credit fraud.

If fraudulent information is identified, having it investigated and corrected may help restore the accuracy of your credit report. The time required to resolve the issue will depend on the circumstances.

Keep Your Credit Accounts in Good Standing

While reducing unnecessary debt is important, closing credit accounts is not always the best first step when trying to improve your credit score. Before closing a credit card or other credit facility, consider how it may affect your finances and how lenders assess your overall credit position.

Focus on maintaining a manageable level of debt, making repayments on time and avoiding unnecessary new credit applications. If you have credit cards you no longer need, review their fees, balances and limits before deciding whether to close them.

There is no universal rule that keeping an account open will improve your Australian credit score. The effect of closing an account depends on your circumstances and the credit scoring model being used.

Control Your Credit Enquiries

Managing the number of credit enquiries is crucial. Try to keep your credit enquiries to no more than 3-4 per year. Excessive credit enquiries can make you appear as if you’re desperately seeking credit, which can be perceived as a higher risk by lenders. This assumption can hurt your credit score.

For instance, applying for multiple credit cards or loans within a few months could negatively impact your credit score. Instead, be strategic about your applications and only apply for credit when absolutely necessary. This careful management is key to raising your credit score over time.

Contact a Professional

Here at Credit Wipe Australia, we are dedicated to improving the credit score of Aussies. We provide a range of credit repair services that all work together to increase your credit score as quickly as possible. Feel free to give us a call on 1300 247 030 for a free assessment.

Avoid High-Risk Areas

Your postcode can influence your credit score. Living in high-risk areas characterised by low income, high crime rates, or high fraud incidences can indirectly impact your credit score. While this factor might not have a massive impact, it’s worth considering.

For example, if you live in an area with a reputation for high crime rates, lenders might view you as a higher risk simply because of your location. Choosing to live in a more stable and lower-risk area can be beneficial, even if the effect on your score is minor. Remember, your surroundings can influence your financial profile, so it’s wise to be mindful of where you live.

However, this is more of an interesting fact than a practical tip. Additionally, moving house does not erase defaults, missed repayments or other legitimate credit history. There is also no guarantee that changing your postcode will increase your score.

Other Ways To Improve Your Credit Score

Your credit score is influenced by several additional factors beyond payment history and loan size. Taking them into consideration will also improve your credit score:

• Age of Your Credit File: A newer credit file may not inspire confidence in lenders. Typically, a credit file needs to be at least two years old to build a reputation for reliability. For example, if you’ve recently started building your credit file, it might take time to reach a high score, so patience and consistent good financial habits are important.
• Length of Employment: A stable employment history increases credit score. Frequent job changes might suggest financial instability. For instance, someone who has been with the same employer for ten years might be viewed more favourably by lenders compared to someone who changes jobs every year.
• Residential Stability: Moving frequently can be a red flag for lenders. A stable residential history is preferable for a strong credit profile. For example, if you’ve lived in the same home for several years, it reflects stability and can raise your credit score.
• Credit Card Limits and Total Debt: It is crucial to manage high credit card limits and significant total debt responsibly. High debt levels or large credit limits can indicate higher risk, so keeping these in check is important. For instance, keeping your credit card balances low and paying off debt promptly demonstrates good financial management and positively affects your credit score.

Benefits of Increasing Your Credit Score

Increasing your credit score can lead to several significant benefits:

• Access to Better Loan Terms: A high credit score often qualifies you for loans with better rates and terms. For example, if you have a high credit score, you might secure a mortgage with a lower rate, which has the potential to save you a substantial amount on the loan.
• Increased Credit Limits: Lenders are more likely to offer higher credit limits to individuals with good credit scores. Greater credit limits can improve your credit utilisation ratio and provide better financial flexibility.
• Reduced Insurance Premiums: Insurance companies may use credit scores to determine premiums. A higher score can result in lower premiums for auto, home, and other types of insurance.
• Enhanced Financial Opportunities: A good credit score opens doors to better financial products and opportunities, such as premium credit cards or higher credit lines. For instance, with a high credit score, you may qualify for a credit card with generous rewards or benefits, providing added value to your everyday purchases.

Common Myths About Fixing Credit Scores

There’s a lot of misinformation out there about how to repair your credit. Here are some common myths:

Myth 1: You can fix your credit overnight.

Reality: Improving your credit score takes time, but with the right steps or professional help, you can see significant improvements within months.

Myth 2: Paying off all your debt will immediately fix your credit score.

Reality: While paying off debt helps, it doesn’t wipe out past mistakes.

What Negatively Affects Your Credit Score?

Several factors can negatively impact your credit score:

• Missed Payments: Late payments on loans or credit cards can severely damage your credit score. For instance, missing a credit card payment can result in fees and a lower score, making it harder to secure credit in the future.
• High Credit Utilisation: Using a large percentage of your available credit can signal financial strain. Keeping your credit utilisation below 30% is recommended. For example, if you have a credit limit of $5,000, aim to use no more than $1,500 of that limit to keep up a healthy credit score.
• Frequent Credit Applications: Regularly applying for new credit can hurt your score and suggest financial instability. Limit your credit applications to avoid this pitfall. For instance, applying for multiple credit cards within a few months can negatively impact your credit score and make you appear as a high-risk borrower.
• Bankruptcies or Defaults: Serious financial events like bankruptcies or defaults have long-lasting negative effects on your credit score. For example, a bankruptcy can remain on your credit file for up to seven years, significantly impacting your potential to obtain credit during that time.

Wrapping Up

In short, repairing your credit score is a long-term investment in your financial future. Whether you work on it yourself or consult professional help, your steps today will make a lasting impact. At Credit Wipe Australia, we believe fixing your credit gives you a second chance at financial freedom. Since 2018, we’ve been committed to making the credit repair process faster, simpler, and more effective than ever before.

Still in doubt and thinking, ‘How do I improve my credit score’? View some of our case studies and contact us today if you wish to know how we can help you increase your credit score and improve your financial objectives. We’re here to guide you every step of the way.