How to repair your credit score

Alex Ritchie

Alex Ritchie

( 5 min read )

Swiping your credit card to buy that new laptop may have felt great in the moment but your lender doesn’t care that your purchase improved your happiness; they care that you pay your monthly invoices – with interest.

Having a bad credit score can sometimes feel like a life sentence. However, there are ways to get your credit score back on track:

Get the most up-to-date version of your score.

Your credit report can be obtained online at Veda Advantage’s website. According to their website, applying for this report is simple and you should not have to pay a third party for a copy;

“A credit report and rating can be obtained online at Veda by providing your full name, date of birth, driver’s license number, current and previous address and forms of identification to help them collect your credit history. In most cases, you will be entitled to this report for free.”

If you’ve obtained your report and you’re still unsure as to how you could have developed bad credit, read Veda’s FAQs about the different things that can look bad on your credit report.

Check for mistakes

It’s not uncommon for credit reports to contain mistakes. One of the most common errors can involve your name being credited with the debt of a family member or stranger with a very similar name to yours.

The Australian Securities & Investments Commission (ASIC) provides a detailed explanation on how to fix incorrect information on your credit report, and how to contact an Ombudsman if you need help.

Pay off your existing debts

This may seem like an obvious step but it’s very important for getting your credit score in order.

If you have multiple sources of debt (personal loan, credit card etc.) you should focus on one debt at a time and budget to pay it off. Once you know how much you owe, you should set money aside to pay one debt off at a time, starting with the debt with the highest interest rate first. If you have any additional cash left over at the end of your pay cycle, put it towards the debt as well.

If you have troubles paying your bills on time. you can set up a direct debit with your bank so your credit card and other bills are paid before the due date. Putting your payments on autopilot removes the stress of having to remember multiple debit dates for various bills.

Mobile Banking Apps

Mobile banking apps such as Pocketbook also help users to pay off existing debt by detecting regular bill payments, notifying you of upcoming bills and auto-categorising your transactions. Their ‘Safely Spend’ feature helps you limit your weekly or monthly spend, so you can budget without stress.

Completely cancel your credit card


Paid off your outstanding credit card debt but don’t trust yourself to keep using the card? It’s time to give it the chop.

While physically cutting your credit card up may be a therapeutic and symbolic way of removing it from your life, you’ll need to close off your account completely to ensure you don’t further damage your credit rating.

If you have a rewards card, once you’ve paid the outstanding balance you’ll want to transfer any existing points to your frequent flyer account and/or redeem the reward points. Then you should contact your lender to advise you want to cancel. Your lender may approve your cancellation over the phone by confirming your identity, although some may request a written cancellation request. If they do not take phone cancellations, simply write to your lender advising you want to cancel and close the account, including your credit card number and account details in the letter. You should receive a cancellation confirmation via mail.

It is also crucial you cancel all direct debits linked to your credit card as this can reactivate your cancelled card. Once the account is well and truly closed you can destroy your credit card.

Would a card with a lower interest rate or higher amount of interest free days would suit you better? Compare different credit card options now.

Add positive information to your credit report

If you’ve read Veda’s FAQ’s regarding why you may have a bad credit history, you will know there are various ways you can show creditors you are aren’t a reliable borrower. But did you know there are also ways you can show lenders you are reliable, without paying off debt?

Lenders look for stability in your personal and financial life. If you:

  • are married;
  • are a homeowner;
  • have lived at the same address for several years, or;
  • have been with the same employer for several years;

…these factors all reflect positively on your credit record. If you believe that this information has not been included in your report, you can notify credit reporting agencies to include it.

Stay on course!


You’ve paid off your debt and you’ve cancelled those tempting credit card accounts – congratulations! Moving forward, make sure you maintain the good habits you’ve developed while repairing your credit history. Keep track of your transactions, budget and save effectively, auto-pay your bills and try to show lenders you have a stable financial and personal life.

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