Bad Credit Score Australia: What It Means and How to Fix It

Quick Answer: A bad credit score in Australia is generally below 460 on Equifax (0–1,200), below 550 on Experian (0–1,000), or below 300 on Illion (0–1,000). It's typically caused by defaults, court judgements, missed repayments, or excessive enquiries. The fastest way to improve a bad credit score is to challenge any unlawfully listed entries under the Privacy Act 1988 — professional removal takes 30–90 days and can produce 100–300 point improvements. Rebuilding through on-time payments takes 6–24 months.

A bad credit score doesn't happen to bad people. It happens to people who went through something difficult — a job loss, a health crisis, a relationship breakdown — and whose credit file recorded the financial fallout without capturing the full story.

The score is just a number. And numbers change.

What Counts as a Bad Credit Score in Australia

A score in the "Below Average" band typically means: automatic declines at most mainstream lenders, non-conforming lending at rates 3–6% higher than standard, potential rejection for rental applications, and difficulty getting telco plans on credit.

The most important thing to know: a bad credit score is almost always caused by specific negative entries on your file — not by some permanent characteristic. Identify those entries, challenge the ones that were listed unlawfully, and the score changes.

What Causes a Bad Credit Score in Australia

A single default can be enough to drop a previously Good score into the Below Average band. Multiple defaults or bankruptcy can push a score to near zero. The good news: for defaults and enquiries listed in breach of the Privacy Act 1988, there's a legal path to removal well before the 5-year expiry.

Real Case Study: Tariq, Adelaide — Score 389. Fixed in 56 Days.

Tariq, 37, an IT consultant from Adelaide, had a score most lenders wouldn't touch. At 389 on Equifax, he'd been declined for a personal loan, a credit card, and a business equipment lease in the same 18-month period. Each rejection added another enquiry to an already damaged file.

His file told a grim story on paper: three defaults, six hard enquiries in 14 months. In reality, all three defaults traced back to a single period — six months when a medical emergency had hospitalised Tariq and his family finances had briefly spiralled. He hadn't known about any of the defaults until he finally checked his file.

His ACS assessment uncovered the following: none of the three creditors had issued Section 21D pre-listing notices before listing their defaults. All three had listed while Tariq was effectively unreachable and without any prior written warning. Two of the six enquiries had been run by a finance broker without Tariq's individual authorisation for each search.

We challenged all three defaults and both unauthorised enquiries simultaneously.

All three defaults were removed. Both unauthorised enquiries were removed.

Result: Tariq's Equifax score moved from 389 to 701 in 56 days — a 312-point improvement. He applied for a personal loan through a credit union and was approved at 11.8% p.a. Three of the lenders who had previously declined him had quoted rates of 28–34% p.a. On a $22,000 loan over 4 years, the interest saving over the specialist rate is approximately $12,300. He only paid when we succeeded. Subject to individual assessment; results may vary.

How to Fix a Bad Credit Score in Australia

Step 1: Get all three credit reports

Start with Equifax, Experian, and Illion. Free under the Privacy Act 1988. You need to see every entry on every bureau before taking any action.

Step 2: Identify what's actually causing the bad score

List every default, every court judgement, every cluster of enquiries. For each one, note: when it was listed, by whom, the amount, and whether you received any written notice before it appeared.

Step 3: Assess which entries can be challenged

The most common removal grounds under the Privacy Act 1988 and Credit Reporting Code:

• No Section 21D pre-listing notice was sent
• The default was listed while a genuine dispute was open
• The amount listed is incorrect
• The debt is statute-barred (6+ years in most states)
• Enquiries were made without proper individual consent

Step 4: Challenge unlawfully listed entries

Either self-lodge with the bureau and creditor, or engage Australian Credit Solutions for professional representation. No Win No Fee. Average removal timeline: 47 days.

Step 5: Rebuild while repairs are underway

Stop all new credit applications. Pay every current bill on time, every billing cycle. Reduce credit card utilisation below 30%. These steps compound with the removal of negative entries.

Frequently Asked Questions

What is a bad credit score in Australia? A bad credit score is generally below 460 on Equifax, below 550 on Experian, or below 300 on Illion. At these levels, most mainstream lenders decline applications automatically, and specialist lending at significantly higher rates is typically the only option. The underlying cause is almost always specific negative entries — defaults, judgements, or excessive enquiries.

How long does a bad credit score last in Australia? Most negative entries that cause bad credit — defaults, court judgements, hard enquiries — last 5 years from the listing date. Serious credit infringements last 7 years. Bankruptcy lasts 5–7 years. However, entries listed in breach of the Privacy Act 1988 can be removed before their expiry date through professional challenge.

Can a bad credit score be fixed in Australia? Yes. Unlawfully listed entries can be removed through professional credit repair, typically in 30–90 days. Entries that were lawfully listed must remain for their full retention period, but rebuilding through consistent on-time payments and reduced credit applications produces gradual improvement over 6–24 months.

How fast can you improve a bad credit score in Australia? The fastest improvements come from removing unlawfully listed defaults under the Privacy Act 1988 — producing 100–300 point increases in 30–90 days. Rebuilding without removal is slower — 6–24 months for meaningful change. The two approaches work best in combination.

Does having a bad credit score affect things other than loans? Yes. A bad credit score can result in rental application rejections, employment screening failures in regulated industries, higher utility and telco deposits, and even affect your ability to access standard phone plans on credit. The impact extends significantly beyond lending.

How do I know what's causing my bad credit score? Get your credit reports from all three bureaus and review them in detail. Look for defaults, court judgements, excessive enquiries, and missed repayment entries. A free assessment from Australian Credit Solutions can walk you through exactly what's on your file and which entries may be challengeable.

A Bad Credit Score Is a Starting Point, Not a Destination

Most of our clients come to us believing their situation is permanent. It rarely is. A free assessment takes 10 minutes and tells you exactly what's possible.

Australian Credit Solutions is ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, and has helped over 5,000 Australians improve bad credit scores since 2014. No Win No Fee. 98% success rate on accepted cases.

Get My Free Assessment → 📞 0489 265 737 🛡️ ASIC Licensed ACL 532003 | ⭐ 4.9/5 from 976+ Reviews | 🏆 Award Winner 2022–2024

Australian Credit Solutions Pty Ltd holds Australian Credit Licence ACL 532003. Credit repair services are subject to individual assessment. Results may vary. This article provides general information only and does not constitute legal or financial advice.

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