How to Fix a Bad Credit Score in Australia (2025 Guide)

How to Fix a Bad Credit Score in Australia (2025 Guide)

Having a bad credit score can feel like a barrier to your financial goals. But in Australia, you have options to improve your score and get back on track. Here’s a step-by-step guide for 2025.

1. Understand Your Current Credit Score

First, know where you stand. Your credit score ranges from 0 to 1,200 in Australia, with scores below 500 considered “bad” by most lenders.

Credit Score Ranges (Example from Equifax)

  • 800-1,200: Excellent
  • 700-799: Very Good
  • 625-699: Good
  • 550-624: Fair
  • Below 550: Poor

2. Request Your Credit Report

Get a free credit report once a year from services like Equifax or Illion.

3. Dispute Any Errors on Your Report

Errors can drag down your score. If you spot inaccuracies, file a dispute with the credit reporting agency. This could raise your score quickly.

4. Pay Your Bills On Time

Late payments can cause significant damage. Set up reminders or automate payments for utility bills, loans, and credit cards.

5. Reduce Your Credit Card Balances

Your credit utilization ratio (how much of your credit limit you’re using) is an important factor. Aim to keep it below 30% of your available credit limit.

6. Consolidate High-Interest Debts

If you have multiple debts, consider consolidating them into a low-interest personal loan. This can help you pay off your debts faster and improve your credit utilization ratio.

7. Avoid Applying for New Credit

Each time you apply for a new credit account, a “hard inquiry” is made, which can temporarily lower your score. Only apply for credit when absolutely necessary.

8. Settle Outstanding Debts

If you have any overdue debts, settle them as soon as possible. This will improve your credit history and show lenders that you’re reliable.

9. Be Patient and Stay Consistent

Improving your credit score takes time. Stick to the steps above and give it a few months for your score to improve.

Final Thought: Is It Worth It?

Improving your credit score is worth the effort. With a better score, you can access lower interest rates, higher credit limits, and better loan options in the future. Take control of your credit today!

Disclaimer: This article is for general information only. Speak with a financial advisor for personalised advice.

Australian man working on fixing his bad credit score

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