Top 5 things that hurt your credit score

Building your credit score can involve some work. Don’t unravel it by making these 5 mistakes.

1. Paying late

Any late payments can decrease your credit score. Both positive and negative repayment behaviour goes on your credit report and if you consistently pay late, this will stand out. Make sure you pay all your bills on time.

2. Making too many credit applications

Put simply, the more credit you apply for (including utilities accounts) in a short space of time, the lower your score will probably become. Don’t apply for credit unless you need it and try to determine if you’re likely to be accepted before applying.

3. Defaults

Any default listed against your name, such as an overdue payment to a credit provider greater than $150 is a red flag against your credit score.

4. Not having any credit

Lenders can’t tell if you’re a responsible borrower unless you have some form of credit history. However, you can build this over time.

Ways to do this can include registering a utility account in your name, switching from a prepaid to postpaid mobile phone plan and getting a low-cost credit card (and of course, paying all of your bills on time).

5. Not identifying credit report errors

Last, but not least, check your credit report for any reporting errors. Mistakes can happen.

If you spot anything wrong on your report, such as disputed default with any credit provider, you can speak to the provider itself, or go through the disputes section within the Credit Simple website to rectify this.


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Credit Simple

Credit Simple gives all Australians free access to their credit score, as well as their detailed credit report. See how your credit score compares by age, gender and community and gain valuable insights into what it all means.

All stories by: Credit Simple