Many people in Australia suffer from a bad credit score, and they don’t even know it. It’s not until you try to finance a new car or get a personal loan that you find out the banks consider you a liability. If you suffer from a poor credit score, here are some tips to help you change that for the better.

Find out your score

Firstly, you need a starting point, so that means finding out your credit score. In Australia, there are three main sources of finding your credit score:

·         Equifax

·         Experian

·         Illion

These three reporting agencies will have different ways of finding out your score, so it’s best to pick one and visit their website for details. Once you have a copy of the report, you can work out exactly why you have a low score. It could be old debts, bankruptcy, types of credit you’ve applied for and many other factors.

Correct errors on your credit report

In some cases, you may find problems on your credit report that you don’t agree with. If this is the case, you should contact the credit reporting agency directly and ask them to investigate. If they find there has been an error, they will correct it. If they find the information is correct, however, you may need to contact the institution concerned, such as the bank or other lender.

If you still have no luck, you can raise the issue with the Ombudsman, or as a last resort, lodge a complaint with the Office of the Australian Information Commission (OAIC).

Pay bills on time

One of the best ways to maintain or improve a good credit score is to pay your bills on time. If a service provider such as your energy, phone or internet company has to chase you for payment, it doesn’t look good. If they lodge the matter with a collection agency, that’s even worse. So, try to use a budget and ensure your bills are paid on time.

Pay down your debt

If you already have a lot of debt, you need to figure out a smart way to pay it down. This can be difficult, but a financial advisor may be able to help with a strategy. Sometimes it’s good to focus on the smaller debts first, get them out of the way, and then you at least have money going out to fewer lenders.

Only apply for credit when absolutely necessary

Finally, only apply for credit when you really need to. This is because the credit reporting agency can see how many credit applications you’ve made. So, if you constantly apply for credit and get rejected, this looks bad on your credit score.