Top tips to build and maintain a good credit score

Your credit score is a numerical indicator lenders use to determine how risk-free you are as a borrower. It is based on the details in your credit report, such as your borrowing history and whether you have made timely payments.

People with low credit scores may be considered a larger risk. This can make some lenders less inclined to approve a loan or credit application, or they are more likely to charge a higher interest rate.

Therefore, if you already have a good credit standing, it’s absolutely essential to maintain a good credit score.

Below are some suggestions to help keep your credit score desirable.

(But if you’ve recently had bad credit or are worried that your credit score might turn out to be less than stellar, you can also use these tips to help improve it.)

1. Get a copy of your credit report.

Knowing what’s in your credit report is the first step in improving your credit score. Request a free copy of your credit report and check it for mistakes.

While credit providers and credit reporting agencies are required to take steps to ensure accuracy, there is still a possibility that your credit report may contain incorrect entries. So, make sure that none of your accounts have any erroneously indicated late payments, and that the credit limits for all of your open accounts are accurate. Be sure to dispute any mistakes you find with the concerned credit reporting agency or credit company.

2. Be prompt with bills and loan payments.

A history of regular and timely payments is crucial to maintaining or raising one’s credit score.

Positive information (such as timely repayment of credit or loan products) can now be included on credit reports, thanks to the advent of comprehensive or ‘positive’ credit reporting.

Conversely, if you fail to make your payments, this may also be noted and have a negative effect on your credit standing.

3. Maintain a low credit card balance.

Your credit score will benefit more from a low average credit card debt than a higher one.

Consider switching to a credit card with a lower interest rate or one that offers 0% for a specific amount of time to lessen the size of your current bill. An effective method for paying off your credit card is through balance transfers.

What is a good credit score?

Credit scores in Australia fall within the following ranges:

  • Below Average: 0 to 509
  • Average: 510 to 621
  • Good: 622 to 725
  • Very Good: 726 to 832
  • Excellent: 833 to 1,200

Although you may not need to have a perfect credit score, you still have to demonstrate your desirability as a loan applicant to creditors by maintaining an acceptable credit score.

Keep yours good or make it better by applying the tips shared here.


If this article has inspired you to think about your own unique situation and, more importantly, what you and your family are going through right now, please contact your advice professional.

(Feedsy Exclusive)


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