10 ways you could be hurting your credit score

Your credit score represents how trustworthy you are as a borrower. Lenders use this number, based on your credit history (such as repayments and credit applications), to decide whether you can get a loan or credit card—and what interest rate you’ll pay. Because it can feel a bit mysterious, many people don’t realise the little things that could be dragging their score down.

Here are 10 things that could be negatively affecting your credit score without you even knowing:

1. Missing BNPL, credit or loan repayments

Missing repayments—whether on a Buy Now, Pay Later (BNPL) account, credit card, utility bills or loan—can seriously hurt your credit score. Since 10 June 2025, BNPL providers must follow the same responsible lending laws as other credit providers, meaning late or missed payments can now be reported to credit reporting agencies. For traditional credit, payments more than 14 days late are recorded on your report for two years, and if you’re over 60 days late on amounts above $150, a default may be listed for up to five years. To avoid falling behind, set a clear BNPL budget before spending and monitor your accounts closely. To ensure you don’t forget a payment, setting yourself reminders or regular direct debits are good ways to keep on top of any repayments you have.

2. Not paying your bills on time

It’s important to keep on top of your phone and energy bills. Although telco and utility companies cannot provide information about your repayment history, they can provide information if you happen to default. Scheduling automatic payments or setting up direct debits can help you keep on top of regular payments.

2. Making too many applications for credit

If you’re shopping around for credit and apply to multiple credit providers within a short timeframe, this can hurt your credit score. An enquiry is added to your report each time you apply for credit and the credit provider requests a copy of your report. These enquiries stay on your report for five years. If a lot of enquiries are recorded in a short period of time, this may indicate to lenders that you’re desperate for credit. Applications for credit can include credit cards, personal and car loans and ‘Buy Now, Pay Later’ (BNPL) services such as Afterpay.

If you’re wanting to apply for credit, it’s best to first assess and compare your options carefully. You may be able to contact a provider directly and discuss your chances of approval, without them having to make a formal credit enquiry. Once you’ve made up your mind, then apply to your chosen provider.

3. Payday loans

Applying for a short-term or payday loan can also impact your credit score. When calculating your credit score, reporting bodies also generally look at the type of providers you’ve applied for credit with. There may be different levels of risk given to applying for a loan with a payday lender compared to a personal loan from a bank or financial institution. This is due to payday loans usually coming with large fees. According to the Australian Government’s Moneysmart website lenders may charge you an establishment fee of up to 20% and a monthly service fee of up to 4% of the amount borrowed. On a $1,000 loan, this could be an establishment fee of up to $200 and a monthly fee of up to $40.

So consider your options carefully and see if there are any cheaper ways to access money if you need it. For example, Good Shepherd provides up to $2,000 or $3,000 no-interest loans to eligible borrowers for certain essential goods and services.

4. Applying for balance transfers too often

Each time you apply for a new credit card, even one with a balance transfer offer, it will be added to your credit report. If you try to shift your credit card balance around and apply for multiple balance transfer offers, this can harm your credit score. If you’ve already transferred your balance once, Moneysmart says it may be better to try to pay off your credit card balance rather than transferring it again. If you have multiple forms of debt, a debt consolidation loan may also be an option you consider.

8. Court judgments and bankruptcy

Court judgments against you, such as a creditor taking you to court over money you owe, will be listed on your credit report. This can flag you as an increased risk and can negatively impact your credit score. Court judgments stay on your credit file for five years from the date of the judgement. If you do repay the money owed however, your judgment can change its status to “satisfied” or “paid”, which may be seen more positively by lenders.

Filing for bankruptcy can also negatively impact your credit score. A record of your bankruptcy remains on your credit report for whichever is later: five years from the date you became bankrupt, or two years from the date your bankruptcy ends. Note that your name will also appear permanently on the National Personal Insolvency Index (NPII).

10. Not regularly checking or fixing your credit report

Regularly checking your credit report is key to keeping your financial health on track. Make sure all personal details, loans, and debts listed are correct. If you spot an error, you can contact your credit provider or a credit reporting body—like Equifax, Experian, or Illion—to have it corrected, free of charge. Avoid companies that promise to “repair” your credit for a fee, as correct information, even negative, cannot be removed. You can usually get a free copy of your credit report once a year, but checking your credit score can be done as often as you like—for example, for free with Canstar or the Canstar App—to stay on top of your credit health.

Get your Credit Score

If you’re finding it difficult to manage your bills or loan repayments, you can ask your lender or service provider about the assistance they offer for financial hardship. You might also want to contact a financial counsellor for help. You can speak to a confidential, independent financial counsellor for free by calling the National Debt Helpline (NDH) on 1800 007 007.