How to improve your credit score

1. Get all three reports and read them

You are entitled to a free copy of your credit report from Equifax, Experian and illion at regular intervals, and additionally after a credit refusal or a correction. Get all three: not every lender reports to all three, so an error on one file will not show up on the others.

Look for:

• Accounts you do not recognise, which can indicate identity theft
• Credit limits or account types recorded incorrectly
• Repayment history marks for payments you made on time
• Defaults that should have aged off
• Enquiries you did not make
• Old addresses or employers that are wrong

2. Correct anything wrong — free

You can ask the credit reporting body or the credit provider to correct information, at no charge. They have obligations to investigate and to respond within set timeframes.

If you are not satisfied with the outcome, you can escalate to the Australian Financial Complaints Authority or the OAIC. Both are free. Nobody needs to be paid to do any of this for you, and firms charging to "fix" or "repair" credit are charging for a process you can run yourself.

3. Pay everything on time — it is recorded monthly

Comprehensive credit reporting means your report carries repayment history information: a month-by-month record of whether each payment was made on time, for each credit account.

This is the most significant behavioural change from the older system. Consistent on-time payments now build your file actively rather than merely avoiding damage — and a payment that is more than a set number of days late is recorded, long before anything reaches the threshold for a default listing.

Set up direct debits for at least the minimum on every account. Not because minimums are a good strategy to carry, but because an automated payment cannot be forgotten.

4. Bring card balances down

See credit utilisation. This is the fastest-moving factor available to you — it can change within a single statement cycle.

Use the credit utilisation calculator to see where you stand, and the debt payoff calculator if several cards are involved.

5. Stop applying

Every credit application is recorded as an enquiry, whether or not it was approved, and enquiries stay on your report for several years. Several in a short period is visible to every lender who looks, and it reads as either shopping around or difficulty getting accepted — a lender cannot tell which.

This includes applications for things people do not think of as credit: phone plans, buy-now-pay-later accounts, and utility accounts with some providers.

If you have applied several times recently, the useful action is to stop for a while and let them age.

6. Deal with hardship before it becomes a default

If you are heading for a missed payment, contact the provider first. Credit providers have hardship obligations, and a hardship arrangement agreed in advance is handled differently from a payment that simply does not arrive.

Free financial counselling is available through the National Debt Helpline. It costs nothing and is independent of your lenders.

7. Build a file if you do not have one

A thin file is hard for a lender to assess. Options:

• A low-limit credit card used for one small recurring purchase and cleared in full each month.
• Utility and phone accounts in your own name, paid on time — these can be reported.
• Avoid using buy-now-pay-later as a credit-building strategy. Arrangements and missed payments can appear on your file, and some lenders view frequent BNPL use unfavourably in a home loan assessment.

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