How do I know if I have bad credit?:

Whether or not you’ve thought about if you have bad credit or not, it’s something you should really consider. It’s important to know where you stand and if you do have bad credit, it’s important to take the time to make steps to improve it.

Most people will have some idea about whether they have bad credit or not. If you have multiple unpaid bills, regularly miss making repayments or have been declared bankrupt you are likely to have bad credit.

What Is Bad Credit?

If you have a bad credit score (low rather than high), it generally means that you are a higher risk borrower. This can mean that it’s harder to get loans approved or that lenders are less keen to lend to you.

Whether or not you have used credit before, you will have a credit record, which lenders can look at to decide whether or not they want to lend to you. If there is evidence on your credit record of things like missed payments, defaults on loans, unpaid credit cards or even bankruptcies, you are likely to have bad credit.

How Do I Check My Credit Score?

Checking your credit score is relatively easy to do as long as you have proof of identification. It’s best to use one of the main government websites to check your credit score – these are:

- Equifax Australia (formally Veda): Equifax.com.au

- Experian: Experian.com.au

- Dun & Broadsheet: checkyourcredit.com.au

It’s really important to check your credit score and request to see your credit record. Check it thoroughly (asking for expert help if you’re unsure what to look for) and make sure that there are no errors there which are adding to your bad credit.

What Can I Do To Improve Bad Credit?

Don’t panic – bad credit can be improved. To improve bad credit, it’s useful to really understand what causes it in the first place.

Think about your Payment History – have you been slow or late with paying bills? Always try and keep all your payments on time and if you’re ever struggling to pay bills, speak directly to your supplier or lender to find a solution.

Reduce your Credit Enquiries – making numerous applications for credit will be recorded on your credit file and will certainly raise red flags to lenders. Only make credit enquiries that you are sure you will use.

Consolidate Your Debts – it’s not good to have multiple loans and it can be hard to keep track when you owe money in numerous spots. Try to put everything you owe into one simple payment to streamline the process and reduce your chance of bad credit.

Stay Stable – it might be easier said than done but always think twice before you leave any type of regular income, switch homes or change your lifestyle. Having evidence of regular paychecks will help your credit, as will evidence of a permanent address and residency.