How to Fix Bad Credit in Australia — The Complete 2026 Guide

Quick Answer: Fixing bad credit in Australia involves two distinct tracks. The first is removing inaccurate or improperly listed negative items from your credit file — this can happen in 30–90 days and has immediate impact. The second is rebuilding positive credit history over time through consistent on-time payments and responsible credit behaviour. Most Australians with bad credit need both, but the removal track is always the right place to start.

Bad credit in Australia doesn't have a single fix. It has a process — and understanding that process, and which parts of it you can accelerate, is the difference between waiting five years for negative listings to expire and actively taking control of your financial future right now.

This is the most complete guide to fixing bad credit in Australia you'll find. It covers what actually works, what doesn't, realistic timelines, when to DIY and when to get professional help, and the specific steps to take depending on what's on your file.

First — Understand Exactly What's on Your Credit File

You cannot fix what you don't know about. The very first step is getting a complete picture of every negative item on your credit file across all three Australian credit bureaus.

Many Australians assume they know what's on their file. They're often wrong. A default from a telco dispute they thought was resolved. A credit enquiry from a lender they don't remember applying to. An old address associated with someone else's debt. These surprises are common — and you can't address them until you find them.

Check your credit score and report for free at all three bureaus — Equifax, Experian, and Illion — before you do anything else. This takes about 30 minutes and costs nothing.

Once you have all three reports, categorise every negative item you find:

• Defaults — amount, creditor, date listed, status (paid/outstanding)
• Credit enquiries — who made them, when, whether you authorised them
• Court judgements — amount, creditor, date
• Repayment history entries — which accounts, what pattern of late payments
• Anything you don't recognise — potential identity fraud

This inventory becomes your action plan.

The Two Tracks of Credit Repair in Australia

Track 1 — Removal of Inaccurate or Improperly Listed Items

This is the fast track. If negative items on your credit file were listed incorrectly or in breach of the Privacy Act 1988 and the Credit Reporting Code, they can be removed — often within 30–90 days.

This isn't a loophole or a trick. It's your legal right under Australian law. The Privacy Act gives every Australian the right to accurate credit information, and it imposes strict procedural requirements on credit providers before they can list negative information. When those requirements aren't followed — and they frequently aren't — the listing can and should be removed.

Common grounds for removal include:

Failure to issue proper pre-listing notices. Before listing a default, a credit provider must issue a written notice (Section 21D notice) giving you a 30-day opportunity to pay or dispute the debt. Failing to do this — or doing it incorrectly — is the most common breach and the most common basis for removal.

Incorrect default amounts. If the amount listed doesn't match the actual amount owed, the listing is factually inaccurate and must be corrected or removed.

Listing a disputed debt. A creditor cannot list a default while a genuine dispute about the debt is unresolved. If they did, the listing is in breach of the Credit Reporting Code.

Statute-barred debts. In most Australian states, debts older than six years that are no longer legally enforceable cannot be listed as defaults.

Identity fraud listings. If the debt relates to credit obtained in your name without your knowledge, the listing must be removed.

Outdated listings. Defaults that have reached their five-year expiry must be removed by the bureau. If they haven't been, you can formally request removal.

This is what Australian Credit Solutions specialises in — reviewing credit files, identifying breaches, and lodging formal Privacy Act disputes on our clients' behalf. We have a 98% success rate on accepted cases and operate on a No Win No Fee basis.

Track 2 — Rebuilding Positive Credit History Over Time

For items that are accurately listed and within their retention period, there is no shortcut. You cannot remove a correctly listed default or judgement that hasn't yet expired. What you can do is build positive credit history alongside the negative, which improves your score over time and demonstrates changed behaviour to lenders reviewing your application manually.

This track is slower — measured in months and years rather than weeks. But it's essential if you have accurately listed negative items that can't be removed.

The key actions on this track are covered in detail below.

Step-by-Step: How to Fix Bad Credit in Australia

1. Get all three credit reports (Free — 30 minutes)

Equifax, Experian, and Illion each hold separate data. A default might appear on one but not the others. You need the complete picture. Full guide to getting your free credit reports →

2. Get a professional assessment of removable items (Free — 60 seconds)

Before you do anything else, find out whether any of the negative items on your file can be removed. This is not something most people can assess themselves — identifying Privacy Act breaches requires knowledge of the Credit Reporting Code and the specific obligations of credit providers.

Get your free assessment →

3. Lodge disputes on removable items

If grounds exist for removal, formal disputes are lodged with the credit bureau and the credit provider simultaneously. Under the Privacy Act, credit providers have 30 days to respond to a dispute. In practice, most cases resolve in 30–90 days.

During this period, you don't need to do anything — ACS handles all communication with the credit provider and bureau on your behalf, and provides regular progress updates.

4. Pay all outstanding defaults (even if they can't be removed)

If a default can't be removed through dispute, paying it changes the status from "outstanding" to "paid." This doesn't remove the listing, but it does improve how the entry reads to a manual reviewer at a lender. An outstanding default signals ongoing financial problems. A paid default signals a problem that was resolved.

Do not pay a default under the assumption that payment removes the listing — it doesn't. But if you're planning to apply for finance and the default genuinely can't be removed, paying it is still worthwhile.

5. Stop all unnecessary credit applications

Every credit application — loans, credit cards, phone plans, buy-now-pay-later accounts — creates a hard enquiry that temporarily lowers your score and stays on your file for five years. If you're actively working on fixing your credit, the worst thing you can do is keep applying for credit and being rejected. Each rejection adds an enquiry and signals desperation to future lenders.

Apply for nothing until your credit repair process is complete or well underway.

6. Set up direct debits for every current obligation

Under Comprehensive Credit Reporting, every on-time payment is now reported and contributes positively to your credit score. Every late or missed payment is also reported and chips away at it. Set up direct debits for every regular obligation — loan repayments, credit card minimums, utility bills — so you never accidentally miss one while you're focused on other things.

7. Reduce credit card balances and limits

High credit utilisation — using a large proportion of your available credit limit — negatively impacts your credit score. Paying down balances and reducing limits (counterintuitively, you can request a limit reduction from your bank) improves your utilisation ratio and demonstrates financial discipline.

8. Don't close all your old accounts

Closing old credit accounts reduces your available credit and shortens your average credit history length — both of which can lower your score. Unless an account has fees you're paying for no benefit, keeping old accounts open and inactive (or with a small regular purchase) maintains your credit history length.

9. Check your file every 6 months

Errors can appear at any time. A credit provider might list an incorrect default. An identity thief might open accounts in your name. A bureau might fail to remove an expired listing. Regular checks let you catch these early before they cause serious damage.

10. Apply for credit strategically once your file improves

Once negative items have been removed and you've built some positive history, approach new credit applications strategically. Use a broker or pre-qualification tool (soft enquiry only) to assess your approval likelihood before making a formal application. Apply for the right product at the right lender on the first attempt.

What Actually Works vs What Doesn't

There's a lot of misinformation circulating about credit repair in Australia. Here's the truth:

What works:

• Disputing and removing inaccurately or improperly listed items through Privacy Act mechanisms
• Consistent on-time payments building positive repayment history
• Reducing credit utilisation
• Waiting for expired listings to be removed (and confirming they are)
• Using an ASIC-licensed credit repair specialist for complex cases

What doesn't work:

• Paying a default expecting it to be removed (it won't be — it changes status but stays on file)
• Closing all your credit accounts (can lower your score by reducing history length)
• Applying for lots of credit to "build history" quickly (creates multiple enquiries and can lower your score)
• Ignoring the problem and hoping it resolves itself (it won't — you need to actively manage it)
• Using unlicensed "credit fixers" who promise instant results for large upfront fees (a common scam — always check ASIC licensing at asic.gov.au)

The biggest myth: that bad credit is permanent and there's nothing you can do. This is completely false. The Privacy Act gives Australians powerful rights to accurate credit reporting. When those rights are enforced — as ACS does every day — credit files that looked hopeless become clean within weeks.

How Long Does It Take to Fix Bad Credit in Australia?

This is the question everyone asks. The honest answer is: it depends on which track you're on.

Track 1 — Removal of improperly listed items: Most successful disputes resolve within 30–90 days. Some straightforward cases resolve in as little as 2–3 weeks. Complex cases involving multiple parties or large creditors can take up to 6 months.

Track 2 — Rebuilding positive history: There's no fixed timeline. As a rough guide:

The fastest improvement always comes from removal. If a default can be removed, doing so adds back the full score value of that listing immediately — often 100–200 points.

DIY Credit Repair vs Professional Help — When to Use Which

Not every credit situation requires professional help. But some absolutely do.

When DIY is appropriate:

• Simple factual errors (wrong address, wrong date) — contact the bureau directly with evidence
• Expired listings that haven't been removed — write to the bureau with the listing date as evidence
• Duplicate listings — contact the bureau and provide evidence the same debt is listed twice
• Identity fraud on your file — contact the bureau's fraud team with a police report

When professional help is worth it:

• Defaults where you believe the credit provider breached procedure but you're not sure how
• Multiple negative items that need simultaneous dispute management
• Cases where direct contact with the credit provider has been unproductive
• Situations involving large creditors (banks, major telcos) who have legal teams you're negotiating against
• Cases where the dispute outcome significantly affects a major finance decision (home loan, business loan)

The key question: what's the financial value of a successful outcome? If removing a default means accessing a standard home loan rate instead of a non-conforming rate, the saving over 30 years can be hundreds of thousands of dollars. Professional fees are trivial against that outcome.

For a full breakdown, read our guide: DIY vs Professional Credit Repair →

Real Case Study: James Fixed His Credit File in 54 Days

James, 42, from Perth, had three items dragging down his credit file: a $650 Optus default from 2022, an AGL energy default from 2021, and seven credit enquiries from a period where he'd applied for multiple loans after a business went under.

He'd assumed his file was beyond repair until his accountant suggested a free ACS assessment.

Our review found that Optus had failed to issue the required Section 21D notice before listing the default. AGL had listed the default while James was in a formal hardship arrangement — a breach of the Credit Reporting Code. The seven enquiries were legitimately listed but ACS identified that three were duplicated across bureaus and could be disputed as inaccurate.

We lodged simultaneous disputes across all items.

Result: Both defaults removed. Three duplicate enquiries removed. Total items removed: 5. Timeline: 54 days. James's Equifax score went from 418 to 691. He was approved for a business loan the following month at a standard rate — a loan he'd been knocked back for three times previously.

Frequently Asked Questions

How long does it take to fix bad credit in Australia? Removable items — defaults or listings that were listed in breach of the Privacy Act — can be removed within 30–90 days through a formal dispute. Rebuilding positive history takes longer — typically 6–24 months of consistent clean financial behaviour to meaningfully improve your score from the ground up.

Can you fix bad credit fast in Australia? Yes — if your negative listings were improperly listed. A Privacy Act dispute that successfully removes a default can improve your score by 100–200 points within days of removal. This is the fastest way to fix bad credit in Australia. There's no fast fix for accurately listed items that are within their retention period.

Is credit repair legal in Australia? Yes. Credit repair is entirely legal and is underpinned by the Privacy Act 1988, which gives every Australian the right to accurate credit information. Credit repair companies must hold an ASIC Australian Credit Licence. Australian Credit Solutions holds ACL 532003.

Can I fix my bad credit myself? For simple factual errors, yes. For defaults and complex disputes involving large creditors, professional help is usually more effective and more time-efficient. An ASIC-licensed credit repair specialist knows the specific procedural requirements credit providers must meet, which breaches are actionable, and how to structure disputes for the best outcome.

What is the fastest way to improve my credit score in Australia? Removing a default through a successful Privacy Act dispute — this can improve your score by 100–200 points immediately. For items that can't be removed, consistent on-time payments under Comprehensive Credit Reporting start showing positive impact within 3–6 months.

Do credit repair companies actually work in Australia? ASIC-licensed credit repair companies with a track record do produce real results. Australian Credit Solutions has a 98% success rate on accepted cases and over 5,000 successfully resolved files. Avoid unlicensed operators or companies that promise guaranteed results for large upfront fees — check ASIC licensing at asic.gov.au before engaging anyone.

How much does credit repair cost in Australia?

Will paying my debts fix my credit score? Partially. Paying outstanding debts changes their status on your file from "outstanding" to "paid," which is marginally better for manual lender review. But it doesn't remove the listing — the default or judgement remains on your file until its 5-year retention period expires or until a successful dispute removes it earlier.

Take the First Step Today

The best time to start fixing your credit was when you first noticed the problem. The second best time is right now.

A free ACS assessment takes 60 seconds and tells you exactly what's on your file, what can be removed, and what the path forward looks like. No obligation, no pressure, no upfront cost.

Australian Credit Solutions — ASIC-licensed (ACL 532003), lawyer-led by Principal Solicitor Elisa Rothschild, No Win No Fee, 98% success rate. Helping Australians fix their credit since 2014.

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.

Related reading: Default Removal Services → | Credit Enquiry Removal → | How to Improve Your Credit Score → | DIY vs Professional Credit Repair →