How Do You Repair Bad Credit?

By Angela Monroe - August 6, 2018

If you have a bad credit score, it can feel incredibly daunting to ever consider applying for loans or asking for help. But don’t worry, there are plenty of ways to repair bad credit to help you borrow money in the future.

What is bad credit?

Bad credit or a low credit score is usually the result of problems with how you’ve used credit in the past. These problems are recorded in your credit history which lenders look at before approving a loan.

People with bad credit pose a high credit risk, so it’s harder to get approved, but it is still possible to get approved for bad credit loans.

There may be a number of reasons why you may have a bad credit score including:

  • Previous bankruptcies
  • Missed repayments or defaults on previous loans
  • Minimal credit history or no history of borrowing
  • Too many credit applications

We want to help you to repair bad credit to be able to borrow money in the future from lenders. There are lots of things you can do if you are interested in fixing bad credit today.

The first step is to get an understanding of your credit score. We can help you get started with a free credit check.

Fixing bad credit

You’ll need to allow yourself a little time for your credit score to rise, but there are plenty of things you can do to repair bad credit.


The first thing you need to do to repair bad credit is to make a long-term plan. This will involve evaluating your finances and creating a budget so that you are never spending outside of your means.

Work out exactly how much you have incoming each month and then note down all of your outgoing costs. It’s essential that to repair bad credit, you never spend more than you can afford as you’ll risk defaulting on monthly payments or building up debt.

Pay bills on time

All of your bills must be paid on time. You can not afford to miss or be late with payments as this will seriously damage your chances of fixing bad credit.

Get organised and put all the due dates of your monthly bills in a calendar. Put reminders on these dates so that you can’t forget. Make this a habit and you’ll be on the road to fixing bad credit.

Stay in a regular job

If you’re currently employed, try to maintain your job and stay in regular employment with the same employer for at least the next six months. Having evidence of a regular salary will help your credit score significantly.

Moving jobs frequently or having long gaps of unemployment can lead to bad credit and lenders will view you as higher risk when applying for loans.

Have a permanent residence

Even if you don’t own a property yourself, you need to ensure that your name is registered on a lease or that you have signed a formal contract. By doing so, you will have evidence that you are living at a permanent address.

If you do need to move homes regularly, make sure you have a record of references from properties where you have lived if required.

Close old accounts

Your finances and any open accounts you have that you don’t use any more may be due for a spring clean. Go through everything – from old mobile phones or old credit cards. If you no longer use something, don’t simply assume that it’s shut down.

Go down official channels, contact companies and ensure any unused accounts are closed down to help repair bad credit scores.

Minimise credit applications

Making endless credit applications may seem harmless – especially when it’s so easy to do online. However, these could seriously jeopardise your chances of fixing bad credit.

Lenders will be able to see any applications that you make and it’ll raise a red flag if there are numerous applications especially within a short space of time.

Getting a debt consolidation loan to improve a bad credit score

For many people with a bad credit score, a debt consolidation loan can be a great way of moving all of your existing debt (often in multiple accounts) into one single account.

This means that your debt is only in one place – easy to keep track of and simpler to manage. You’ll quickly be able to see the total amount that you owe and budget accordingly.

With a debt consolidation loan, you may also reduce the amount of interest you pay on your loan by only having one loan rather than multiple agreements.

We want to help you raise and improve your credit score. Our team can help you understand your options and advise whether a debt consolidation loan can help you repair bad credit.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.



August 14, 2018

Hi, I’m wanting to know how I can arrange to have all my debts paid off I think it’s under 3000 but it’s hard to keep track of multiple payments I would rather everything be paid off in one payment overtime

How do I know if I have bad credit? | Bad Credit Specialists

November 28, 2018

[…] If you find out that you have bad credit, there are lots of things you can do to help improve your credit score. […]

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