Credit & Finance Australia
A poor credit score can make it harder to get approved for a car loan, personal loan, or mortgage — and when you are approved, the rates offered are often higher. The good news is that under Australia’s current credit reporting system, your score can improve faster than many people realise. Here’s what actually moves the needle in 2026, and how to get started.
How credit scoring works in Australia in 2026
Australia operates under a Comprehensive Credit Reporting (CCR) system, which has been fully embedded across major lenders since 2022. Unlike the older negative-only system, CCR means your credit file now records both positive and negative information — every on-time repayment counts in your favour, not just missed ones against you.
Your credit score is calculated by the three main Australian credit bureaus: Equifax, Illion, and Experian. Each uses a slightly different scoring model, so your score may vary between bureaus. Lenders typically check one or more of these when assessing a loan application.
Understanding this matters because it changes the strategy: in the CCR era, consistent positive behaviour builds your score actively — you don’t just have to wait for old negatives to expire.
Eight steps to improve your credit rating
1. Get a copy of your credit report
You’re entitled to a free credit report from each bureau once every three months, or within 90 days of being declined for credit. Request yours from Equifax, Illion, and Experian — ideally all three, as lenders may check any of them. Check each report carefully for errors, outdated listings, or accounts you don’t recognise. Incorrect information can suppress your score without your knowledge, and you have the right to dispute it.
2. Dispute errors promptly
This step deserves its own entry in 2026. Identity fraud and data errors have become more common, and a single incorrect default or hard enquiry you didn’t authorise can significantly drag down your score. If you find anything inaccurate, contact the bureau directly to lodge a dispute — they are legally required to investigate and correct confirmed errors, typically within 30 days. You can also contact the lender that reported the listing.
3. Pay every bill on time, every time
Under CCR, consistent on-time repayments are now actively reported to your file — not just defaults. This means paying every bill on time (loans, credit cards, utilities, buy-now-pay-later accounts) builds positive credit history rather than simply avoiding damage. Set up direct debits for minimum repayments on all accounts to eliminate the risk of a missed payment through forgetfulness.
2026 note: Buy-now-pay-later (BNPL) services such as Afterpay and Zip are now increasingly visible to credit bureaus. Missed BNPL repayments can appear on your credit file in the same way as missed loan repayments. Manage these accounts with the same discipline as any other credit product.
4. Reduce your existing debt
Your credit utilisation — how much of your available credit you’re using — is a factor in your score. High balances relative to your credit limits suggest financial stress to lenders. Focus on paying down high-interest debt first (typically credit cards), and aim to keep your credit card balances below 30% of the limit. If managing multiple debts is difficult, debt consolidation into a single lower-rate loan can simplify repayments and, over time, improve your score.
5. Limit new credit applications
Every formal loan or credit application generates a hard enquiry on your credit file, which temporarily lowers your score. Multiple applications in a short period signal financial stress to lenders, regardless of whether they were approved. Before applying for any credit, check your eligibility using a soft enquiry tool (which doesn’t affect your score). A broker like Ezilend can assess your profile and target only the lenders most likely to approve your application, protecting your file from unnecessary enquiries.
6. Keep older accounts open
The length of your credit history is a positive factor in your score. Closing an old credit card or account — even one you rarely use — shortens your average account age and removes positive repayment history from your active file. Unless an account carries fees that outweigh the benefit, it’s generally better to keep it open with a low or zero balance.
7. Monitor your credit regularly
Free credit monitoring services from Equifax, Illion, and Experian allow you to track changes to your score in real time and receive alerts when new enquiries or listings appear. In 2026, with digital identity fraud on the rise, regular monitoring is no longer optional — it’s a basic financial hygiene practice. Catching an unauthorised enquiry early can prevent a fraudulent loan application from compounding the damage.
8. Seek professional help if you’re stuck
If your credit situation is complex — multiple defaults, a debt agreement, or a bankruptcy that has since been discharged — a reputable credit repair service or financial counsellor can help you navigate the process. Free financial counselling is available through the National Debt Helpline (1800 007 007). Be cautious of firms that charge large upfront fees or promise to remove accurate negative listings — legitimate services can only dispute and correct genuine errors.
How long do negative listings stay on your credit file?
| Listing type | How long it stays on your file |
|---|---|
| Late payment (overdue account) | 2 years |
| Default (unpaid debt listed by a lender) | 5 years |
| Court judgment | 5 years |
| Serious credit infringement | 7 years |
| Bankruptcy | 5 years from date of discharge (or 2 years from end of bankruptcy, whichever is later) |
| Debt agreement (Part IX) | 5 years from date of agreement (or 2 years after completion, whichever is later) |
| Hard enquiry (credit application) | 5 years |
Can I still get a car loan with bad credit?
In many cases, yes. Ezilend works with a panel of lenders that includes specialist non-conforming lenders who assess applications differently from mainstream banks. These lenders look at your current financial situation — not just your history — and may approve loans for borrowers with defaults, discharged bankruptcies, or previous declines, provided the repayments are demonstrably serviceable.
The key is being upfront with your broker about your credit history from the outset. This allows Ezilend to target the right lenders and avoid applications that are unlikely to succeed — protecting your score from further hard enquiries.
Frequently asked questions: credit scores and car loans in Australia
What is a good credit score in Australia in 2026?
Score ranges vary by bureau. As a general guide: Equifax scores range from 0 to 1,200, with 622–725 considered “good” and 726–832 “very good”. Illion and Experian use a 0–1,000 scale with similar banding. A score above 700 (on most scales) typically gives you access to competitive loan products. Scores below 500 may limit your options to specialist lenders at higher rates.
How quickly can I improve my credit score?
Under CCR, positive changes can reflect in your score relatively quickly. Correcting a genuine error can improve your score within 30 days. Consistent on-time repayments accumulate positive history month by month. More significant improvements — such as recovering from a default — typically take six to twelve months of consistent positive behaviour, though the trajectory depends on the severity of the original issue and what other activity is on your file.
Does checking my own credit score lower it?
No. Checking your own credit report or score is a soft enquiry and has no impact on your score. Only hard enquiries — formal applications for credit submitted to a lender — appear on your file and affect your score. You can check your report as frequently as you like without any negative consequences.
Do buy-now-pay-later services affect my credit score?
Increasingly, yes. BNPL providers in Australia have been expanding their credit reporting practices, and missed repayments can now appear as negative listings on your credit file with some bureaus. In 2026, it’s safest to treat BNPL accounts with the same discipline as a credit card — never miss a repayment, and be mindful of how many accounts you have open.
Can a paid default be removed from my credit file?
A paid default does not automatically disappear from your credit file — it remains for five years from the date it was listed, but the status updates to “paid” once settled. Some lenders view a paid default more favourably than an unpaid one. If the default was listed in error (for example, you disputed the debt and it was resolved in your favour), you can request its removal through the bureau.
What is the difference between a default and a late payment?
A late payment is typically recorded when a repayment is overdue but eventually paid. A default is a more serious listing recorded when a debt of $150 or more remains unpaid for 60 days or more and the lender has notified you. Defaults have a greater negative impact on your score and remain on your file for five years. Late payments are recorded under CCR but carry less weight and stay on file for two years.
Will debt consolidation hurt my credit score?
Applying for a debt consolidation loan generates a hard enquiry, which may temporarily lower your score. However, if consolidation results in you meeting all repayments consistently on a single loan (rather than struggling across multiple), the medium-term effect on your score is typically positive. Closing the consolidated accounts may shorten your credit history, so weigh that consideration before deciding which accounts to close.
Talk to Ezilend today
At Ezilend, we work with Australians at every stage of their credit journey — including those who have been knocked back elsewhere. Whether you’re working to rebuild your score or need a loan now despite an imperfect history, our team can assess your options honestly and find a path forward.
Please don’t hesitate to ask us if you need assistance.
