Ways to Improve Your Credit Score

The contents provided on this page are for informational purposes only and do not constitute financial advice. Consider your personal circumstances and objectives before making any financial decisions.

Whether you’re applying for a loan, signing a rental agreement, or even setting up a utility account, your credit score can influence the outcome. 

But what exactly is a credit score, and how can you improve yours? 

Let’s break down different ways you could improve your credit score. 

How do credit scores work?

A credit score is a number that indicates to traditional lenders your creditworthiness i.e. how reliable you are with money. The range depends on the credit bureau, but in Australia a credit score usually ranges from 0 to 1,000 or 0 to 1,200. See Canstar’s breakdown of credit score ranges.

Your credit score will consider your financial habits, like paying bills on time and managing debt. Generally, the higher your score, the more reliable you are with money (and therefore as a borrower), and the more favourable you are for banks and lenders. Meanwhile, a low credit score can typically result in limited access to credit, or even declined applications. 

What impacts your credit score?

A number of factors might impact your credit score. Some common factors are:

• Payment history – whether you pay your bills and loans on time. Consistent on-time payments are generally a sign that you are a reliable borrower. 
• Credit use – how much of your total credit limit you use. High use can indicate over-reliance on credit. 
• Credit history – the older your credit accounts, the more evidence of your financial behaviour and experience with managing credit. 
• Types of credit used – such as credit cards, personal loans and a mortgage. A mix can indicate your ability to manage different types of credit responsibly. 
• New credit enquiries – recorded on your credit report each time you apply for credit. Too many applications may be seen as a red flag. 

Can you improve your credit score? 

By setting smart financial habits and making small, consistent efforts, you may be able to improve your credit score over time. 

Here are some practical tips you could try to get started! 

1. Pay bills on time

Your payment history is an important factor in your credit score. Make it a priority to pay every bill—whether it’s your credit card, phone bill, or utilities—by the due date. Setting up automated payments or reminders can help ensure you never miss a deadline! 

You could consider bill help with Beforepay Pay Advance for those moments when you have an upcoming bill and are caught in between paydays. 

2. Reduce high credit card balances

The average limit for a credit card in Australia is $9,989. In 2024 Finder reported the average balance per credit card in circulation was $3,348, with emergencies listed as the top reason for taking out a credit card recently. Keeping your credit utilisation low, as well as paying down high balances, can not only impact your credit score, but help you reduce your overall debt. 

3. Check your credit report regularly

Errors on your credit report, like outdated debts or incorrect late payments, can drag your score down. Check your credit report annually through agencies like Equifax, Experian, or illion so you can ensure your information is accurate, and dispute any mistakes to have them corrected.

4. Avoid unnecessary credit applications

Each time you apply for credit, a hard enquiry is added to your report, which can lower your score slightly. Only apply for new credit when you truly need it, and try to space out applications over time.

5. Keep old accounts open

The longer your credit history, the better it is for your score. Even if you’re not actively using an old credit card, keeping the account open can improve the length of your credit history and maintain your overall credit limit.

Improving your credit score doesn't happen overnight, but with consistent effort, it’s achievable. Focus on building good financial habits, like paying bills on time and managing debt wisely, to see steady improvements. 

If you need quick funds for an unplanned expense, you could consider no credit check loans like Beforepay's Pay Advance - a safe and affordable option to tide you over in the meantime.