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How to Repair Your Credit Rating In Australia
June 11, 2019● 7 minute read●
Written by - Jacaranda Team
Are you worried that poor credit is getting in the way of borrowing money for a holiday or a loan for a car? Want to repair your credit score but unsure how to do it?
If this is the case, don’t worry. Jacaranda Finance has done the hard work for you. We understand that bad credit can have a long-lasting impact on your ability to get a home loan, personal loan or even a car loan. So, we’ve broken down what a bad credit score is and how it could affect you.
Jacaranda has everything you need to know about credit repair. We could even help you tackle credit card debt!
What Is A Credit Score?
Before we go any further, let’s clarify what a credit score actually is. A credit score, or credit rating, is a number that is given based on a level analysis of a person’s credit file. This represents the creditworthiness of an individual. A credit score is based off a credit report. The information used to conduct a credit report is sourced from a credit bureau.
To put it simply, your credit score tells a lender how trustworthy you are as a borrower. It’s important to remember that the higher the number, the better your credit score is. If you apply to find out what your credit rating is through a credit agency like Equifax, you will be given a numerical value between 0 and 1,200. This number will summarise your entire credit report and allows lenders to assess whether or not it is worth lending to you.
What Can Affect Your Credit Score?
Many people are unaware of what factors can influence their credit score. The truth is several different factors play a part in determining your credit score. Here’s the rundown…
|Good For Credit||Bad For Credit|
- Paying bills on time
- Ensuring that outstanding loans and credit card debt are paid
- Not continuously applying for a new credit card or loans
- Having a low balance on your credit card
- Making repayments on time every
- Keeping a low balance on your credit card
- Keeping ‘good’ credit accounts where you have continuously made repayments
- Having an available credit limit that is higher than your usual credit balance
- Applying for too many credit cards or loans
- Applying and being rejected for credit cards or loans
- Failing to make repayments on a loan or making late payments
- Getting lots of multiple balance credit cards one after another
- Failing to repay a balance transfer credit card by the end of the promotional interest rate period
Will Checking My Credit Score Affect My Credit Rating?
There is a long-standing myth that checking your credit rating has a negative effect and will somehow leave a mark against your name. This is completely untrue. You can check your credit rating without any impact being made on your credit score. In fact, checking your credit score is a good way to stay on top of your creditworthiness. You can actually check your credit score once a year for free, and we recommend you do so. Remember, staying on top of your credit is a good idea if you are planning on applying for a fast cash loan soon.
How To Repair Bad Credit
Wondering what you could do to get on top of bad credit? Getting on the right track with your credit score is an important goal for anyone looking to be eligible for a home loan, personal loan or even a car loan. Repairing your credit score doesn’t happen overnight; however, there are things you can do now to make a change. So, if you’ve been googling ‘credit repair loan’, ‘business credit repair’, ‘credit repair loans’, ‘business credit repair companies’, then you might want to keep reading.
Check Your Credit Score
First and foremost, we suggest you get a copy of your credit score. It is important to understand what you are dealing with and what areas you can improve on. Remember, everyone is eligible for one free credit check per year. It is recommended to check your credit rating regularly to ensure there are no incorrect listings.
Fix Incorrect Listings
We get it, sometimes mistakes and defaults are unavoidable and, unfortunately, they will appear on your credit report. However, it is essential to make sure you rectify any incorrect listings. If you’ve been a victim of fraud, then there may be mistakes on your credit report. If this is the case, it is important to get in touch with your credit reporting agency or credit provider to rectify the situation.
Get Out Of Debt
The best thing you can do to improve your credit score is to get out of debt. There are lots of debt help options out there; often, it is just about finding the right one. Debt consolidation loans can help make repayments easy and centralised. Having one large repayment, instead of multiple small ones, means you are more likely to make the repayment. Balance transfer credit cards can also be a good option to reduce the interest payable. Fulfilling the repayments during the promotional period could save you a chunk of cash. It is important, however, to remember that entering into a debt agreement can have an impact on your credit score.
Get Your Repayments Under Control
It’s important to remember that in Australia, your credit report contains both positive and negative information about your credit history. Making repayments when they are due is one of the biggest factors in determining your credit score. If you’re looking to improve your credit rating, then showing that you can make timely repayments on your current credit cards or loans is an excellent place to start.
Don’t Make Excessive Credit Applications.
Making lots of credit applications over a short period of time is not a good idea if you are looking to improve your credit score. Unfortunately, when you make multiple enquiries on a credit card or loan, it is recorded on your credit report. This often causes possible lenders to get the impression that you are under financial stress.
Get Help From The Experts
Although there are a variety of different aspects you can take control of all on your own, sometimes we all need a helping hand. There are lots of avenues of support available for people suffering financial hardship or people who need debt help. Financial counsellors can also offer expert advice on how you to get your finances under control.
Rush Credit Repair
Unfortunately, there is no such thing as a ‘rush credit repair’ or ‘credit repair loans’. The way to improve credit is to start paying off your debt: the more regular repayments you can make, the better. Obviously, life does get in the way sometimes. So, if you’re looking to improve your credit score but know you will not be able to make a repayment, it is a good idea to get in touch with your lender or credit card company. Often, when given enough notice, you might be able to arrange an alternative repayment schedule. It is important to remember, however, that every lender is different.
Business Credit Repair Companies
Are you wondering whether a business credit repair company is a real thing? Well, technically, yes they are. Credit repair companies claim to be able to take negative listings off your credit report. However, we suggest that you keep your wits about you. Often, these companies will ask for a significant chunk of cash upfront and might not always follow through with what they promise. So, if you are going to use a business credit repair company, it is important to do some investigating beforehand. Read more about business credit repair companies here.
Jacaranda Finance Australia
Here at Jacaranda Finance, we are all about being transparent. So, we do our best to offer clear, up-to-date information when it comes to short-term personal loans.
Some people need that instant cash loan to head overseas or a quick unsecured loan to make ends meet between paydays. Others may be looking for rental bond assistance or a car loan. No matter what your loan is for, Jacaranda likely has a finance product that may be suitable for it.
For those who have bad credit or are unemployed, quick loans can be a lifesaver. In addition to potentially helping out in a pinch, according to Australian law, once you have paid off your loan debt, the lender is obliged to update the listing on your credit file as soon as practicable.
Now You’re Familiar With Credit Repair, What Next?
There are a few things we have unpacked in this article that you must take into account to begin repairing your credit or, if you decide to go down this route, rushing to a credit repair company. However, to read more about credit repair services, Jacaranda Finance recommends you visit the Australian Financial Complaints Authority (AFCA) for more information on all queries you may have around credit repair. Additionally, if you have any concerns regarding how this may impact your application for a loan with us, please contact us via our Enquiry Form or call us on 1300 189 823.
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Jacaranda Finance is a lender. We do not offer financial advice. Consider seeking independent legal, financial, taxation or other advice to check how the information and ideas presented on this website relate to your unique circumstances.
Written by Jacaranda Team