How Can You Improve Your Credit Score?

6 Feb 2022

How to Correct Errors on Your Credit Report and Boost Your Credit Score

Discovering errors on your credit report can be frustrating, especially when these mistakes impact your ability to secure loans or credit. Fortunately, you have the right to have these errors corrected for free. Here’s a guide on how to identify and rectify these inaccuracies and tips on improving your credit score.

Identifying and Fixing Errors for Free

Common Errors in Credit Reports

Errors on your credit report can range from incorrect personal details to inaccurate financial data. Here are some types of errors you might find:

Personal Information Errors: Incorrect details like your name, address, or date of birth.
Account Errors: Debts listed more than once, incorrect debt amounts, or accounts opened due to identity theft.
Debt Listing Errors: Debts mistakenly listed as overdue or defaults incorrectly noted while disputes were ongoing.

How to Correct These Errors

Correcting Agency Errors

Contact the credit reporting agency directly if you find errors related to your personal information or debt listings. Most agencies are equipped to address these issues promptly.

Correcting Credit Provider Errors

If the error stems from the credit provider, such as incorrectly reporting an overdue payment or not updating a settled dispute, reach out to them to request a correction. If they acknowledge the mistake, they will instruct the credit agency to update your record.

If disagreements persist, you can escalate the issue to the Australian Financial Complaints Authority (AFCA) for free and independent resolution.

What You Can’t Change

Remember, not all information on your credit report can be altered. Accurate information, even if negative, will remain on your report. This includes:

All payments made or missed in the past two years.
Overdue payments of $150 or more.
All credit applications made in the last five years.

These entries reflect your financial history and cannot be removed until they naturally expire from your record.

Beware of Credit Repair Companies

While you might encounter services promising to clean up your credit report for a fee, be cautious. Ensure any credit repair company you consider is licenced through ASIC’s website. Remember, you can correct most errors yourself without cost, and paying a credit repair company doesn’t guarantee your credit score will improve.

Tips to Improve Your Credit Score

If you’re looking to boost your credit score, consider the following steps:

Lower your credit card limits.
Limit credit applications.
Ensure timely payments on bills, rent, or mortgages.
Aim to pay full balances on your credit cards or at least exceed minimum payments.

Adopting these practices can gradually improve your credit score, enhancing your eligibility for future credits or loans.