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Building Credit History in Australia

Credit and your financial history/report/rating can be frustrating when it comes to money decisions. On the one hand, credit can be a fantastic tool to help you get a loan or a mortgage, buy household items, save on interest rates, or rent a home. But, on the other hand, if poorly managed, credit can be a problem for many, many years and cause you to miss out on financial opportunities.

It takes a long time to build a good credit record, but your credit history is very easy to damage, and takes an even longer time to rebuild once destroyed.

The Importance of Your Credit Report

Your credit history warns lenders about possible risks if they agree to lend you money. When you apply for credit (ie. to get a monthly mobile phone plan), the company offering the service will contact a credit rating agency to check your credit report.  All credit-related activity in Australia is recorded on a credit rating agency database.

Credit Rating Agencies & Credit Checks

The two major credit rating agencies in Australia are Veda Advantage and Dun and Bradstreet.  Your credit report contains information including all banks loans/any credit you have ever applied for, if you have defaulted (failed to make payments) on a loan, and details of any court action brought against you. This information is kept in the database for 5 years, or 7 years in the case of serious infringements. Records of bankruptcy are also kept for 7 years.

Creditors access this information to decide whether you are a low or high-risk borrower, if you should be granted or denied a loan, and/or if you should be charged a lower or higher interest rate.

Who else checks credit? Landlords can use credit reports to see how consistently you pay your bills. Certain jobs require credit checks to verify information listed on your resumé, or to avoid trouble in jobs where money/sensitive financial information are involved.

An overview of how credit history works is available on the Office of the Australian Information Commissioner website.

Maintaining Your Good Credit History

Take advantage of your fresh start to establish a good credit history in Australia. One good way is to start using a credit card …BUT be sure to pay off your balance in full every month in order to show potential lenders that you are financial reliable. Also, be sure to pay your monthly bills on time.

On top of paying your monthly bills and loan instalments on time, you need to be careful when signing up for services such as cable television, telephone, internet, gym subscriptions, and other services that carry a monthly fee. Know the cancellation fees and payment due dates when you sign up for such services.

Never move house without cancelling/transferring your services, because final bills can end up in collections (a bad debt office) by accident. These unpaid bills can be recorded on your credit report for the next 5 years. Always keep a record when you make such changes by writing down the date, name of the agent you spoke to, and your case/report number.

If you are having a hard time financially (like an extended period of unemployment), do not be lazy about your credit! Call your creditors and ask to renegotiate your monthly payments. They will generally be willing to help you because they want to get their money. If you can, suspend or cancel services, rather than have bills growing.

In the end, credit is a sensitive tool, but you will definitely need it when starting your new life in Australia…so manage it to your advantage. Learn as much as you can about building a good credit history, and…keep in mind…it’s much easier to avoid credit damage than to fix it later!


One of the best ways to maintain a good credit history is having a budget and sticking to it. Our partner ANZ has tools and information to help you develop a budget. There is even a tool that automatically tracks your spending across various categories, find out more.