How to clean your credit report and repair your credit score
If your credit score has taken a hit and you’re wondering “How can I fix my credit score?” This guide will help you learn the fastest way to repair your credit score in Australia and rebuild your credit rating with confidence.
What is a credit report, and what is a credit score in Australia?
Think of your credit report like your financial report card, while your credit score is the grade. In Australia, credit scores range from zero to 1,000 or 1,200, depending on the credit reporting agency. Lenders use it to gauge financial reliability, identity verification and credit risk.
A good score can mean lower interest rates, cheaper credit fees, and stronger borrowing power. A low score (or bad credit report) can mean higher rates and limited access to credit providers.
What does a credit report include, and how do credit reporting agencies collect your data?
Your credit report includes:
- Personal details (name, date of birth, address, driver’s licence number)
- Credit inquiries (soft inquiries, hard inquiries)
- Your current credit accounts and credit limits
- Repayment history, late payments, overdue debts and credit defaults
- Court judgments, debt collectors, financial hardship information
- Data collected by Australia’s credit reporting agencies: Equifax, Experian, illion.
Where can you check your credit report for free in Australia?
You can access a free credit report every three months from:
- Equifax
- Experian
- illion.
Because each credit reporting company receives different lender data, checking all three ensures full visibility of your credit file.
You can also get your credit score for free through platforms like Canstar, Finder or Wisr.
What’s the difference between Equifax, Experian and illion?
Australia’s three consumer reporting companies all use different scoring models:
- Equifax: 0-1200
- Experian: 0-1000
- illion: 0-1000.
Scores vary because lenders don’t have to report to all agencies.
Why are scores different across credit reporting agencies?
Each credit bureau calculates credit scores differently, weighing factors like payment history and credit utilisation uniquely. Plus, lenders aren’t required to report to all three, so your credit file may vary between agencies.
How is a credit score calculated and what affects it the most?
Your credit score is based on several key factors:
- Payment history: late or missed payments drag your score down
- Credit utilisation: using too much of your available credit can hurt your score
- Length of credit history: a long, well-managed credit history helps
- Types of credit: a mix of secured loans, unsecured loans, credit cards, and overdrafts can be beneficial
- Public records and credit inquiries: too many credit applications in a short time is a red flag.
Here’s an example of how Equifax categorises scores:
- Below average (0-459) high risk of negative credit events
- Average (460-660) moderate risk
- Good (661-734) lower risk
- Very good (735-852) very low risk
- Excellent (853-1200) almost no risk.
A higher score means better chances of loan approvals and lower interest rates.
What is a default, how long does it stay, and how does it impact your credit score?
A default is a serious black mark on your credit report and happens when:
- A debt of $150+ is overdue by more than 60 days
- The lender has followed the debt escalation process.
Defaults stay on your report for five years, even after repayment.
What is a bad credit report, and what does it cost you financially?
A bad credit report typically includes:
- Defaults
- Frequent hard inquiries
- Missed repayments
- High credit utilisation
- Accounts in hardship arrangement.
According to a 9News report, someone with a poor score could be charged 19.99% on an unsecured loan at ANZ compared with 7.49% for someone with excellent credit. Other lenders (like Latitude) can show even larger gaps.
How to clean your credit report and improve your credit score without paying for credit repair
Here are the most effective steps you can take to repair your credit score and clean your credit report:
- Keep credit card balances low: this improves your credit utilisation, which is one of the fastest ways to lift your score. If you’re struggling with credit card debt, our guide on how to get out of credit card debt in Australia shows you practical ways to reduce your balance
- Stop making only minimum repayments: minimum payments keep your balance growing and your credit score falling. Our article on the true cost of making only minimum payments explains how this impacts interest, long-term debt and your credit rating
- Avoid relying on Buy Now, Pay Later (BNPL) services: late or missed BNPL payments can be recorded on your credit report. If BNPL is getting out of hand, our guide on BNPL and your credit score can help you gain control again
- Reduce or close unused credit accounts: too many open accounts or high total available credit can negatively impact your credit rating
- Pay bills and loans on time: set up automated payments or reminders so you never miss a due date
- Reduce your credit limits: lower limits can help manage spending and improve your credit utilisation rate
- Avoid unnecessary loan applications: every hard inquiry can temporarily reduce your score
- Monitor your credit report regularly: this helps you spot errors, identity theft or suspicious activity early
- Ask for hardship support if you’re struggling: arrangements with lenders can prevent defaults and protect your credit file, and our guide on financial hardship and your credit score explains how hardship support works and how it impacts your credit report.
Recent positive behaviour has a bigger impact than older mistakes, so even small changes can shift your score in the right direction.
Can you remove a default from your credit report in Australia?
You can only remove a default from your credit report if it was listed in error. If you think a default is incorrect, take these steps:
- Contact the creditor to dispute it
- If unresolved, lodge a complaint with the credit reporting agency
- If necessary, escalate to the Australian Financial Complaints Authority (AFCA).
Can credit repair companies clean your credit report?
You might see companies promising to ‘wipe’ bad marks from your credit report, for a hefty fee. The truth? If a default or missed payment is legitimate, it stays on your report.
How can budgeting help repair your credit score?
A solid personal budget helps you:
- Avoid missed repayments
- Reduce credit card debt
- Build an emergency fund
- Stay organised with upcoming bills.
- Building savings is a huge part of repairing your credit score, and even small amounts add up. Use our Savings Calculator to see how quickly your buffer can grow and how it can help protect your credit report from future missed repayments.
Need help getting a budget started? Download our free Personal Budget Template.
How can MyBudget help you clean your credit report and rebuild your credit rating?
At MyBudget, we take the stress out of money management with a 12-month personalised budget plan that’s tailored to your unique financial situation. If you need a more customised approach to managing your debts and improving your credit score, we can help by:
- Paying bills on time
- Reducing overdue debts
- Creating long-term financial security
- Speaking to your creditors for you
- Preventing further defaults, missed payments or hardship markers.
Did you know, most MyBudget clients pay off their unsecured debts in under three years! With over 130,000 Australians helped, MyBudget has been a trusted financial solution for over 25 years.
Call 1300 300 922 today to chat with one of our expert Money Coaches or enquire online for a free, no-obligation consultation.
FAQs
How long does it take to repair a credit score in Australia?
Repairing a credit score can take anywhere from a few months to a couple of years, depending on the issues listed on your credit report. Positive repayment behaviour and reducing credit card debt can improve your score more quickly, while defaults remain for five years.
Does checking my own credit report hurt my credit score?
No. Checking your own credit report is considered a soft inquiry, which does not affect your credit score. In fact, monitoring your report helps you spot errors and identity theft early.
How long do missed payments stay on my credit report?
Missed or late repayments can stay on your credit report for up to two years, and they can lower your credit score during that time. Setting up automatic payments can prevent this.
Can identity theft damage my credit score?
Yes. Fraudulent accounts, unauthorised inquiries or compromised personal information can all harm your credit file. If you suspect identity theft, contact your credit reporting agencies immediately to request a credit report ban or correction.
How does MyBudget help improve my credit score?
MyBudget helps improve your credit score by ensuring your bills are paid on time, reducing overdue debts, managing repayment schedules and helping prevent defaults. Consistent on-time payments can significantly strengthen your score over time.
Can MyBudget talk to my creditors if I’m behind on payments?
Yes. MyBudget can communicate directly with your creditors, set up payment arrangements, request hardship assistance and help stop collection calls, making it easier to regain control and protect your credit report.
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