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Having a bad credit score makes it tougher to land finance when you need it. The good news is you can nurse your credit score back to health.

How bad is a bad credit score, really? Here’s how to be credit healthy

Have you checked your rating as a passenger on Uber lately? If you had just one out of five stars, you’d be seriously worried that drivers would avoid you. (Hot tip: slamming the car door can get you marked down for bad manners.)

There’s another important score you should keep your eye on, too, and that’s your credit score. 

If you have a high credit score, lenders are more confident about approving you for a loan or credit card. But a low credit score means they might avoid taking you on. 

So, what’s a credit score all about? How do you keep yours in top-notch condition, and how do you nurse it back to health if it’s taken a tumble?

Credit reports and your credit score 

If you’ve ever applied for a loan or a credit card, you’ll have a credit report with a credit reporting agency such as Experian, Equifax and illion. Any organisation offering you credit can access your credit report with your permission. 

Your credit report includes:

  • your name and address
  • all loans and credit amounts you’ve had in the past two years
  • all credit applications you’ve made in the past five years
  • your repayment record, including late payments on utility and phone bills. Late payments over $150 and 60 days or more late, stay on your record for five years.
  • if you have any financial hardship arrangements (from 1 July 2022)
  • any loan defaults or debt-related legal proceedings. 

It does not include:

  • any record of your income, savings, or assets – it’s just your credit history.

Your credit score basically summarises everything in the credit report. It’s a number between 0 and 1,000 or 0 and 1,200, depending on the credit reporting agency (a typical credit score is between 625 and 699).

You can request a free copy of your credit report once every three months from each agency (Experian, Equifax and illion). This is an easy way to check your credit score, keep track of how much you’re borrowing, and make sure there are no mistakes on your record. If there are mistakes, you can contact the agency and get them corrected for free. 

You can also contact each agency just to check your credit score. 

What affects your credit score? 

You can build an excellent credit score by paying your utility bills, loan instalments and minimum credit card payments on time. 

You can pull down your credit score by:

  • missing repayments
  • paying bills late
  • having too much credit (even if you’re not using it)
  • making lots of credit applications in a short time
  • applying for a payday loan
  • applying for balance transfers on a credit card too often.

If lenders see a lot of enquiries about your credit report in a short period, that’s a red flag that you could be in financial stress and unable to pay back a new loan. So, you should only make credit applications if you plan to use them. 

Why you should care about a bad credit score 

Having a bad credit score won’t ruin your life, but it certainly makes things harder.

You’ll have more difficulty being approved for loans and credit when you need it – even if it’s in-store credit to pay off a laptop or new phone. 

When you find a lender, you may have to pay a higher interest rate until the lender is satisfied you’re reliable. Any credit card you get may have a lower limit. 

How you can lift your credit score

If your credit score isn’t as healthy as you’d like, you don’t need to hide under a doona for five years. Instead, you can start getting it in better shape. 


  • paying down debt and lowering your credit card limit 
  • closing down credit accounts you’re not using
  • paying your credit card when it’s due, either in full or more than the minimum repayment 
  • paying bills, rent or mortgage, and loan repayments on time
  • staying ahead of bills by setting up direct debits, automatic transfers, or popping in calendar reminders two days before the payment is due. (If you’re short of funds, contact the provider to see if you can get a payment extension.)
  • consolidating high-interest debts (your credit cards, etc) into one lower-interest loan
  • using a debit rather than a credit card. 

Setting out a budget will help you a lot, and you’ll find useful advice on the Health Professionals Bank website. There’s also a free budget planner tool you can use.

If you’re really struggling with your finances, then contact a free financial counselling service. There’s a useful list on the government’s Moneysmart website

Health Professionals Bank | Bank differently Find out more about how you can boost your financial wellbeing today. 

This information is general in nature and does not take your personal objectives, financial circumstances or needs into account. Consider its appropriateness to these factors before acting on it. Membership eligibility applies to join Health Professionals Bank. Membership is open to citizens or permanent residents of Australia who are current or retired employees in the Australian health sector or are family members of members (i.e. shareholders) of the Bank. Health Professional Bank is a division of Teachers Mutual Bank Limited ABN 30 087 650 459 AFSL/Australian Credit Licence 238981. 

If your credit score isn't as healthy as you'd like, you don't need to hide under a doona for five years!

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